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StuMee  in  Bu6tne60 

First  Series^  No.  2. 


ACCOUNTS  OF  EXECUTORS  AND  TESTAMENTARY 
TRUSTEES:  Lectures  before  the  N  ew  York  Univer- 
sity School  of  Commerce,  accounts  and  Finance 


BY  JOSEPH  HARDCASTLE,  C.  P.  A.,  PROFESSOR  OF  PRIN-" 
CIPLES  AND  PRACTICE  OF  ACCOUNTS,  SCHOOL  OF  COM- 
MERCE, ACCOUNTS  AND  FINANCE.  NEW  YORK  UNIVERSITY 


Publications  of  the  New  York  University  School 
OF  Commerce,  Accounts  and  Finance,  New  York,  1903. 


Copyright,  1903,  by 
NEW  YORK  UNIVRRi 


N\^ 


<J^' 


^ 


PREFACE. 

This  book  has  been  written  primarily  for  the  aid  of  students. 
It  gives  in  substance  the  matter  which  I  present  in  a  course 
of  lectures  at  the  New  York  University  School  of  Commerce, 
Accounts  and  Finance.  For  the  students  who  hear  these  lec- 
tures it  will  serve  as  a  syllabus.  The  book,  however,  is  more 
than  a  syllabus,  and  the  general  reader  will,  I  trust,  find  it  a 


CORRIGENDA 


Page  1 6,  last  line,  change  has  to  have. 

23,  line  26,  change  distinguish  to  extinguish.      . 

45,  line  21,  change  186 10  to  1/610. 

45,  line  25,  change  1567.50  to  1642.50. 

48,  line     9,  change  receive  to  exceed. 

50,  line     2,  change  per  $100  to  for  $100. 

62,  in  (7),  change  Paid  Transfer  T  $500  to  Paid  Trans- 
fer T  $50. 

62,  in  (7),  change  addition  on  Credit  Side  from  $2050 
to  $1050. 

70,  in  (9),  change  Paid  A.  Langstader  $72.12  to  Paid 
A.  Langstader  $7512 

71,  in  ( 14) ,  interchange  debit  and  credit  sides  of  account. 
75,  last  line,  change  54195  to  54159. 


phraseology.  The  chief  sources  on  which  I  have  depended  are, 
the  Code  of  Civil  Procedure  of  the  State  of  New  York,  and 
"Chaplin  on  Express  Trusts  and  Powers,"  with  the  kind 
consent  of  the  author  of  this  latter  work. 

It  must  not  be  thought  that  this  treatise  will  be  of  use  only 
in  the  State  of  New  York,  for  the  general  principles  of  the 
law  are  applicable  throughout  the  United  States. 

Joseph  Hardcastle,  C.  P.  A. 

New  York  City,  October  28,  1903. 


1 1    t  f. 


PREFACE. 

This  book  has  been  written  primarily  for  the  aid  of  students. 
It  gives  in  substance  the  matter  which  I  present  in  a  course 
of  lectures  at  the  New  York  University  School  of  Commerce, 
Accounts  and  Finance.  For  the  students  who  hear  these  lec- 
tures it  will  serve  as  a  syllabus.  The  book,  however,  is  more 
than  a  syllabus,  and  the  general  reader  will,  I  trust,  find  it  a 
source  of  independent  help  and  guidance  in  his  study  of  the 
subject.  I  have  aimed  to  make  it  useful,  not  only  to  the  teacher, 
but  also  to  the  professional  accountant. 

The  book  has  the  following  objects  in  view: 

1.  To  bring  the  lawyer  and  the  accountant  into  accord  on 
the  subject,  so  that  they  may  profitably  co-operate  in  their 
mutual  work. 

2.  To  give  the  accountant  such  a  knowledge  of  both  the 
principles  and  practice  of  the  law  that  he  may  do  his  work 
intelligently,  leaving,  however,  the  legal  guidance,  the  pro- 
cedure, and  the  forms  to  be  attended  to  by  the  lawyer. 

3.  To  bring  out  prominently  the  distinction  between  cor- 
pus and  income. 

4.  To  interpret  mathematically  sundry  decisions  of  the 
courts. 

It  has  not  been  thought  advisable  to  include  the  "sale  of 
real  estate  for  payment  of  debts,"  since  that  subject  pertains 
to  the  surrogate. 

With  respect  to  the  law  portion,  it  is  more  a  compilation  than 
an  original  work,  as  I  deem  ^t  better  to  give  it  in  approved 
competent  language  than  to  give  it  less  effectively  in  my  own 
phraseology.  The  chief  sources  on  which  I  have  depended  are, 
the  Code  of  Civil  Procedure  of  the  State  of  New  York,  and 
"Chaplin  on  Express  Trusts  and  Powers,"  with  the  kind 
consent  of  the  author  of  this  latter  work. 

It  must  not  be  thought  that  this  treatise  will  be  of  use  only 
in  the  State  of  New  York,  for  the  general  principles  of  the 
law  are  applicable  throughout  the  United  States. 

Joseph  Hardcastle,  C.  P.  A. 

New  York  City,  October  28,  1903. 


TABLE  OF  CONTENTS. 


I.     Classes  of  Business,  and  Their  Contrast. 

II.  Businesses  in  which  the  Proprietors  are 
Legally  Incapable  of  Conducting  their 
Businesses. 

III.  General  Scheme  of  Executors'  Accounts. 

IV.  Duties  of  Surrogates  and  Executors. 

V.    Executor's  Inventory. 

VI.    Distribution   of   Assets    and    Principles   of 
Book-keeping. 

VII.  Legacies,  and  a  Summary  of  the  Prustciples  of 

Accounting. 

VIII.  Order  of  Distribution  of  Residue.    Advance- 

ments, Commissions. 

IX.    Investments  and  Realization  of  Property. 

X.  Offsets  to  Income  and  to  Corpus.  Apportion- 
ment AND  Adjustments  of  Expenditures. 


ACCOUNTS  OF  EXECUTORS  AND  TES- 
TAMENTARY TRUSTEES. 

LECTURE  I. 

Classes  of  Business  and  Their  Contrast. 

So  far  as  Accounting  is  concerned,  business  can  be  divided 
into  two  great  classes: — 

1.  Businesses  which  belong  to  proprietors  and  are  man- 
aged by  proprietors  or  by  persons  appointed  by  the  proprietors 
for  the  proprietors'  benefit. 

2.  Businesses  in  which  there  is  inability  on.  the  part  of  the 
proprietors,  and  others  are  chosen,  either  by  the  proprietors 
themselves  or  by  competent  authority  as  substitutes  for  the 
proprietors,  to  transact  the  business  in  the  place  of  the  pro- 
prietors. 

The  subject  matter  with  which  the  proprietors  are  concerned 
embraces  real  and  personal  property  (either  one  or  both), 
such  as  is  capable  of  valuation. 

The  value  is  expressible  in  money. 

Such  businesses  are  organized,  as  to  ownership,  into  the  fol- 
lowing kinds : 

1.  Under  a  sole  proprietor. 

2.  Under  general  partners. 

3.  Under  special  partners,  or  under  both  general  and 
special. 

4.  Under  a  joint  stock  ownership. 

The  subject  matter  of  a  business  under  the  control  of  pro- 
prietors is  called  their  assets,  and  is  expressed  in  money. 

The  obligations  under  which  proprietors  are  placed  and  which 
arise  out  of  the  business  are  called  the  liabilities.  These  also 
are  expressed  in  money.  In  order  to  bring  out  clearly  the  two 
great  classes  of  businesses  and  consequently  to  contrast  them, 
we  will  explain  the  theory  on  which  each  of  them  is  founded, 
as  originating  in  the  law. 


6    '"'''''      Account^'  of  Executors 

(a)    businesses  in  which  the  proprietors  are  persons 

(natural  or  artificial)  who  are  capable  of 

conducting  businesses. 

The  P ersonalistic  Theory. 

According  to  the  personalistic  theory,  accounts  are  divided 
into  three  great  classes,  according  to  the  three  classes  of  people- 
heading  the  accounts.  The  first  class  are^qrxesppndent  account^ ; 
the  second,  custodian  accounts ;  and  the  third,  proprietor  ac- 
counts. Correspondents  are  all  those  persons  who  arejuristi- 
cally  liable  to  the  proprietor  or  to  the  administrator  of  the 
business  for  an  existing  debt;  they  are  his  true  debtors,  the 
payment  of  whose  debts  the  proprietor  or  administrator  can 
enforce  by  law.  Correspondents  likewise  comprehend  all  those 
persons  who  can  juristically  enforce  the  payment  of  the  debts 
which  the  proprietor  owes  to  them.  The  latter  debts  constitute 
the  true  liabilities  of  the  proprietor.  These  juristic  accounts, 
accounts  of  true  debtors  and  true  creditors,  comprise  not  only 
open  accounts  with  persons,  but  include  all  those  debits  and 
credits  of  persons  towards  the  proprietor  not  indeed  headed 
with  the  name  of  persons,  but  nevertheless  debits  and  credits 
of  persons  toward  the  proprietor  supported  by  documentary 
evidence,  such  as  bills  receivable  and  bills  payable,  and  mort- 
gages receivable  and  mortgages  payable,  debits  aijd  credits 
which  have  taken  the  accounts  out  of  the  open  accounts,  and 
placed  them  under  other  categories.  It  is  not  our  business  here 
to  give  the  subdivision  of  the  only  class  of  accounts  which 
are  truly  debtors  and  truly  creditors  of  the  proprietor.  The 
creditor]^  are  the  true  and  only  liabilities  of  the  proprietor,  while 
the  debtors  represent  the  only  persons  who  have  liabilities 
toward  the  proprietor.  This  term  liabilities  is  used  in  the 
strict  sense  of  claims  which  can  be  enforced  by  the  law. 

We  come  now  to  the  second,  or  custodian,  class  of  accounts. 
A  custodian  is  one  who  is  trusted  with  the  care  of  property 
for  another;  he  is  a  trustee.  He  is  called  by  various  names, 
according  to  the  class  of  property  he  has  in  his  charge.  One  who 
has  the  custody  of  cash  is  called  a  cashier;  one  who  has  the 
control  over  cash,  a  treasurer ;  one  who  has  the  charge  of  prop- 
erty, a  st^orekeeper,  or  some  other  equally  significant  name. 


AND  Testamentary  Trustees.  7 

The  proprietor  may  be  his  own  custodian,  in  which  case  there 
are  two  personalities  joined  in  one.  All  assets  not  included 
under  the  correspondent  class  belong  to  the  custodian  class. 
The  na^Qie^f  custodian  heading  each  account  has  been  gradually 
dropped^and  only  the  kind  of  property  over  which  he  is  custod- 
ian remains.  Instead  of  putting  Custodian  of  Merchandise  as 
the  heading  of  an  account,  we  simply  say,  Merchandise,  and  in- 
stead of  saying  Custodian  of  Cash  or  Treasurer,  we  simply 
say  Cash. 

The  word  ''debtor"  of  the  correspondent  class,  meaning  one 
under  liability,  has  been  idealogically  applied  to  the  custodian 
class;  i.  e.,  the  use  of jthe ^^^  has  been  extended  to  the  cus- 
todian class,  with  an  entirely  altered_meaning.  It  no  longer 
implies  a  liability,  but  simply  a  responsibility  or  accountability 
for  the  goods  entrusted  to  the  custodian's  charge ;  if  they  dis- 
appear he  must  be  able  to  tell  why  they  disappear,  and  show 
that  it  is  through  no  fault  of  his  own.  The  word  ''creditor"  is 
also  idealogically  transferred  to  this  class  of  accounts,  with  the 
meaning  that  the  custodian  is  freed  from  his  responsibility. 

In  all  accounting  in  which  the  proprietor  or  owner  is  not 
the  central  figure,  trusteeship  prevails,  and  the  ideas  of 
the  custodian  class  of  accounts  are  dominant.  The  Mer- 
chandise account  is  the  typical  account  of  this  class.  The 
custodian  is  debited,  in  the  altered  sense,,  with  what  he  had 
on  hand  at  the  beginning,  with  what  he  has  received,  and 
with  all  increase  in  value,  under  the  name  of  profit;  then  he 
is  credited  with  all  he  has  parted  with,  and  with  any  decrease 
in  value  or  loss ;  and  finally  he  is  credited  with  what  he  has 
on  hand  at  the  true  accounting.  As  the  trustee  has  had  a 
limited  right  of  ownership  conferred  upon  him,  and  as  he  is 
also  custodian  of  the  fund  in  his  charge,  consisting  of  all 
his  assets  in  his  dual  capacity  of  custodian  and  trustee,  he 
debits  or  charges  himself  with  the  fund,  with  all  additions 
thereto,  and  with  all  profits ;  he  credits  himself  with  all  trans- 
fers of  property  to  others,  with  all  losses,  and  finally  with 
what  he  has  on  hand. 

As  to  the  third  class  of  accounts,  proprietor  accounts,  they 
represent  the  accounts  of  the  proprietor  as  capitalist.  The 
capital  fund  with  which  they  begin  is  the  excess  of  assets  over 
liabilities  or  the  proprietor's  equity  in  the  business.    The  pro- 


8  Accounts  of  Executors 

prietor  in  these  accounts  takes  credit,  i.  e.,  he  holds  responsible 
the  administrator  who  is  debited,  or  held  responsible  for  the 
fund,  of  the  business,  resulting  from  the  correspondent  and  the 
custodian  accounts.  He,  the  administrator,  or  the  proprietor 
as  administrator,  is  debited  ^with  the  fund  with  which  the 
business  commences,  and  the  proprietor  as  capitMist  is  credited. 

You  will  observe  that  this  fund  is  not  a  liability  of  the  ad- 
ministrator, buLt  merely  a  responsibility;  hence  the  capital  is 
not  ajiability,  as  is  frequently  stated.  All  increase  of  the  capi- 
tal fund  which  represents  the  fortunes  of  the  business,  belongs 
to  the  proprietor  as  capitalist. 

From  what'  we  have  said  may  be  deduced  the  following 
rule:  (a)  Debit  him  who  receives  a  value.  In  the  case  of  a 
con-espondent  he  becomes  a  true  debtor ;  i.  e.,  he  is  really  liable. 
In  case  of  a  custodian,  he  becomes  idealogically  a  debtor ;  i.e., 
he  is  answerable  for  the  goods  committed  to  his  charge,  (b) 
Credit  him  who  gives  a  value.  In  the  case  of  a  correspondent, 
he  becomes  a  true  creditor;  i.  e.,  he  can  hold  the  proprietor 
liable.  In  case  of  a  custodian,  he  becomes  idealogically  a 
creditor ;  i.  e.,  his  responsibility  for  the  goods  he  has  given  out 
ceases. 

In  the  case  of  the  proprietpr  as  capitalist  we  noticed  that  he 
became  a  debtor  for  Certain  values  representing  decreases  of 
the  capital  fund,  and  creditor  for  all  increase  of  the  capital 
fund;'the  former  signifying  that  for  the  losses  he  released  the 
administrator,  who  took  credit  for  the  same ;  the  latter  signify- 
ing that  for  gains  he  put  further  responsibility  on  the  adminis- 
trator,, who  became  responsible  to  so  much  the  greater  extent. 
Hence  collecting  together  and  making  one  general  rule  we 
have : 

Debit  him  who  receives  a  value  or  who  of  a  value  becomes 
debtor;  and  credit  him  who  gives  a  value  or  who  of  a  value  be- 
comes creditor. 

We  will  give  two  illustrations  : 

Bought  Merchandise  for  Cash  $500. 

Here  the  Custodian-  of  Merchandise  is  debtor  to  Proprietor^ 
creditor,  $500. 

Proprietor  is  debited  to  Cash,  creditor,  $500. 

The  central  figure,  the  £roprietor,  is  both  debtor  and  creditor 
for  $^0.     The  proprietor's  account  is  unnecessary,  since  it  is 


AND  Testamentary  Trustees.  9 

both  debtor  and  creditor  for  $500.  The  custodian  of  merchan- 
dise remains  a  debtor  for  $500.  The  custodian  of  cash  is  a  cred- 
itor, i.  e.,  is  relieved  of  his  obHgation  to  the  extent  of  $500.  We 
usually  say  Mdse.  Dr.  to  Cash  $500.  This  does  not  mean  what 
it  says,  for  Merchandise  is  not  debtor  to  Cash.  But  it  means 
that  as  a  result  of  the  transaction,  there  remains  an  account  to  be 
debited  $500,  and  another  to  be  credited  the  same.  Pacioli 
wrote  it:  By  Mdse.  ^  to  Cash,  signifying  that  the  proprietor 
was  creditor  by  merchandise  and  the  proprietor  was  debtor  to 
cash,  the  two  carets  showing  the  omission  of  the  proprietor's 
name  twice.  Nearly  a  hundred  years  after,  Manzoni  wrote  it : 
Mdse.  II  Cash.  This  is  an  example  of  debiting  him  who  re- 
ceives a  value,  the  custodian  of  merchandise,  and  crediting 
him  who  gives  a  value ;  viz.,  the  custodian  of  cash. 

Again:  Bought,  for  the  use  of  the  office,'^^tafionery  from 
John  Brown,  $10.  Here  the  goods  bought  were  for  consump- 
tion in  the  office,  and  consequently  on  their  consumption  the 
proprietor  as  capitalist  became  poorer,  and  the  proprietor  as 
administrator  assumed  a  liability  to  John  Brown.  Debit  him 
who  of  a  value  becomes  a  debtor ;  viz.,  the  proprietor  as  capital- 
ist, under  that  branch  of  his  accounts,  called  Profit  and  Loss, 
and  credit  him  who  gives  a  value.  Profit  and  Loss  to  Pro- 
prietor as  administrator,  $10,  and  Proprietor  as  administrator 
debtor  to  John  Brown,  $10. 

Since  the  proprietor  as  administrator  is  both  debtor  and  credi- 
tor $10,  this  account  can  be  omitted  from  our  books  of  acqount 
and  it  only  remains  to  debit  Profit  and  Loss  $10,  and  credit  John 
Brown  $10. 

LECTURE  IL 

(b)  businesses  in  which  the  proprietors  are  legally  in- 
capable OF  conducting  their  businesses. 

In  the  place  of  the  proprietor  and  the  custodians  of  the  first 
class  of  businesses  is  substituted  the  administrator  of  the  busi- 
ness. 

The  administrator  takes  the  generic  name  of  trustee,  and 
according  to  the  duties  imposed  upon  him,  various  specific 
names,  such  as  executor,  administrator,  testamentary  trustee, 
receiver,  assignee,  guardian,  etc.     In  his  powers  he  is  subject 


lo  Accounts  of  Executors 

to  the  source  of  his  appointment,  with  such  other  restraints 
as  the  law  may  further  impose. 

As  substitute  for  the  proprietor,  the  trustee  is  the  absolute 
owner  of  the  trust  property  against  the  whole  world,  and  is 
accountable  to  no  one  but  the  beneficiaries  of  his  trust,  this 
latter  condition  arising  from  his  becoming  a  custodian  for 
others.  For  the  above  reasons  the  estate  under  the  trustee  is 
called  the  legal  estate,  and  the  estates  under  the  beneficiaries, 
the  equitable  estates.  The  estate  of  the  trustee  consists  in  the 
ownership  of  the  property  itself,  and  as  such  owner  he  can 
sue  and  be  sued,  and  perform  many  functions  pertaining  to 
a  property  owner;  while  the  beneficiary,  by  reason  of  his 
right,  in  a  court  of  equity  can  compel  the  trustee  to  carry  out 
the  provisions  of  the  trust. 

There  are  three  classes  of  facts  affecting  a  trustee  as  a 
person  of  inherence  and  as  a  person  of  incidence,  with  respect 
to  jus  in  personam  and  jus  in  rem. 

1.  Investive  facts,  by  which  he  has  become  invested  with 
certain  rights  and  powers. 

2.  Translative  facts,  by  which  he  becomes  invested  with 
certain  rights  and  powers,  at  the  expense  of  being  divested  of 
other  rights  and  powers. 

3.  Divestive  facts,  by  which,  in  consequence  of  being  a 
person  of  incidence,  he  becomes  divested  of  rights  aod  powers 
which  belong  to  him  as  a  person  of  inherence. 

The  following  arrangement  of  facts  applies  to  trusteeship  in 
general,  wherever  applicable ;  but  it  has  more  immediate  refer- 
ence to  the  trustee  as  executor  or  to  the  trustee  as  testamentary 
trustee,  of  whose  account  keeping  we  shall  treat  in  these 
lectures : 

(A)  The  trustee  as  a  person  of  inherence,  with  respect  to 
jus  in  personam  and  jus  in  rem. 

I.     Investive  facts  of  trusteeship. 

1.  Inventory  of  assets  coming  into  trustee's  hands. 

2.  Increase  from  newly  discovered  assets. 

3.  Increase  from  use  of  corpus. 

a.  From  rents. 

b.  From  interest. 

c.  From  dividends. 


AND  Testamentary  Trustees.  ii 

4.  Collection  of  debts  inventoried  as  bad,  desper- 

ate or  valueless. 

5.  C hoses  in  action. 

6.  Liquidation  of  partner's  interest. 

7.  From  foreign  administration. 

8.  From  growing  crop,  the  result  of  cultivation. 
II.     Investive  facts,  arising  from  translative  facts,  such 

as  gains  from  sales. 
(B)  Trustee  as  a  person  of  incidence,  with  respect  to  per- 
sons in  interest,  creditors,  debts  incurred  for  account  of  estate. 
I.     Divestive  facts  of  trusteeship. 

1.  Losses  arising  from  translative  facts. 

2.  Debts  marked  bad  or  doubtful  not  collected. 

3.  Debts  appraised  as  good  which  trustee  is  not 

able  to  collect,  by  exercise  of  ordinary  dili- 
gence. 

4.  Funeral  charges  and  testamentary  expenses. 

5.  Articles  of  property  perished  or  lost  without 

trustee's  fault. 

6.  Amounts  paid  creditors. 

7.  Actual  and  necessary  expenses  paid  in  manage- 

ment of  estate,  and  execution  of  trust. 

8.  Amounts  paid  to  testamentary  legatees  and  next 

of  kin. 

9.  Items  of  property  remaining  unsold  or  uncol- 

lected, with  appraised  value  thereof. 
10.     Claims  of  creditors  presented  to  and  allowed 
by  trustee  for  which  a  judgment  or  decree 
has  been  rendered  against  him. 
On  examining  the  above  arrangement,  it  will  be  seen  that 
the  subject  is  divided  into  two  grand  divisions,  the  first  of 
which  relates  to  the  trustee  as  a  person  of  inherence. 

(A)  With  respect  to  the  investive  facts,  the  trustee  has  a 
double  relation,  viz.,  as  custodian  and  as  owner.  As  custodian 
he  is  debited  when  he  becomes  invested  with  the  facts,  and  as 
owner  he  becomes  a  creditor  with  respect  to  the  same  facts. 
Hence  the  following  rules : — 

I.  As  custodian  of  an  investive  fact,  the  trustee  is  debtor 
to  the  trustee  as  owner,  the  latter  being  creditor  for  the  same 
investive  fact. 


12  Accounts  of  Executors 

2.  When  he  divests  himself  of  an  investive  fact,  as  owner 
he  is  debited,  because  his  property  is  diminished;  and  as  cus- 
todian he  is  credited,  because  he  is  discharged  of  responsibiHty. 

Here  debtor  and  creditor  signify  responsibiHty  and  discharge 
from  responsibiHty  as  custodian. 

If  now  we  take  the  assets  of  the  personal  estate  of  an  estate, 
and  present  each  class  of  them  as  under  the  trustee  as  custodian, 
under  the  name  of  its  category,  and  the  whole  under  the  trustee 
as  owner  of  these  assets  collectively,  of  the  personal  estate,  we 
have : 

Dr.     Asset  A.     Cr. 


Value  (a) 

Dr.     Asset  B.     Cr. 

Value  (b) 

Dr.     Asset  C.     Cr. 

Value  (c) 

etc. 

Dr.     Personal  Estate     Cr. 

Value    (a+b+c+etc.) 

The  accounts  Asset  A,  Asset  B,  Asset  C,  etc.,  represent 
the  fact  that  the  trustee  is  custodian  of  the  goods  underlying 
these  assets,  and  is  responsible  for  their  value,  and  the  per- 
sonal estate  account  represents  the  fact  that  he  is  owner  of  the 
same.  As  custodian  he  is  said  to  debit  or  charge  himself  with 
all  the  investive  facts.  All  the  personal  assets  collectively  are 
called  the  corpus,  or  principal,  or  fund  of  the  estate,  and  some- 
times the  capital. 

Often,  however,  it  devolves  on  the  trustee  to  take  care  of  the 
income,  i.  e.,  that  which  arises  from  the  use  of  the  corpus,  or 
of  the  real  estate,  as  well  as  the  corpus.  In  that  case,  as  the 
income  comes  in  in  the  shape  of  cash,  he  debits  himself  as 
custodian  in  the  cash  account,  and  credits  an  income  account 
with  the  same,  under  some  appropriate  heading,  such  as  In- 
terest Account,  Rent  Account,  Dividend  Account,  or  perhaps 


AND  Testamentary  Trustees.  15 

Beneficiary  Account;  and  each  one  of  these  may  be  either  a 
particular  account,  i.  e.,  refer  to  a  single  beneficiary,  or  a 
collective  account,  i.  e.,  refer  to  several  beneficiaries,  or  to 
several  sources  of  income. 

Besides  these  income  accounts,  we  sometimes  have  accounts 
representing  the  sale  of  real  estate,  when  it  is  to  be  treated 
as  personal  property.  In  this  case  also  Cash  Account  is 
debited,  and  Sale  of  Real  Estate  Account  is  credited  for  the 
selling  price. 

(B)  We  will  now  consider  the  trustee  as  a  person  of  in- 
cidence.  All  those  accounts  so  affected  as  to  cause  a  diminu- 
tion of  the  fund  of  the  estate  must  be  credited  with  the  diminu- 
tion, and  the  personal  estate  account  debited  with  the  same 
diminution,  for  the  reason  that  the  estate  has  not  yielded  the 
full  amount  of  the  appraised  valuation,  such  as  items  i,  3,  and 
5  of  the  divestive  facts. 

It  will  be  necessary  to  debit  the  personal  estate  account  with 
such  items  of  the  divestive  facts  as  4,  6,  7  and  8,  as  they  be- 
come determinate,  and  to  open  either  particular  or  collective 
accounts  for  the  same,  which  will  be  credited  with  the  items 
respectively. 

Examples.  Suppose  there  has  been  a  loss  of  $100  in  the  sale 
of  Mdse.  The  custodian  account  Mdse.  has  been  debited  with 
the  appraised  value,  then  credited  with  the  selling  price,  and 
finally  is  credited  with  the  loss  on  the  sale,  $100.  The  personal 
estate  is  debited  with  the  loss,  $100. 

Suppose  the  funeral  expenses  amount  to  $280.  The  Personal 
Estate  Account  is  debited  with  this  amount,  and  an  account 
called  Funeral  Expenses  is  opened  and  credited  with  $280. 

We  now  have  three  sets  of  accounts : — 

1.  The  custodian  accounts,  which  are  specific;  i.  e.,  they 
represent  things  which  can  be  exchanged  or  handed  over,  and 
with  which  the  trustee  is  debited. 

2.  The  personal  estate  account,  which  represents  the  trus- 
tee, as  the  legal  owner  for  all  values  of  the  corpus  which 
have  not  been  taken  out  of  it  to  meet  the  incidences  of  the 
estate. 

3.  The  distributive  accounts,  which  also  represent  the 
trustee  as  the  legal  owner,  but  so  distributed  as  to  show  how 
the  distribution  shall  take  place -among  the  equitable  owners, 
so  far  as  it  has  at  any  time  been  determined.    Distributive  ac- 


14  Accounts  of  Executors 

counts  are  of  three  kinds,  one  kind  representing  income,  which 
arose  out  of  the  receipts  paid  in  to  the  trustee  for  interest,  rents 
or  dividends;  the  second  representing  corpus  which  is  taken 
out  of  Personal  Estate  Account,  and  has  to  be  distributed 
among  its  class  of  distributees;  and  the  third  representing 
money  received  from  the  sale  of  real  estate,  when  it  is  required 
to  be  treated  as  personalty. 

RELATION.  BETWEEN    CUSTODIAN    AND   DISTRIBUTIVE    ACCOUNTS. 

The  next  entries  show  the  connection  between  the  custodian 
accounts  and  the  distributive  accounts,  or  the  divesting  the 
custodian  of  his  custodianship,  for  which  he  as  custodian  takes 
credit ;  i.  e.,  the  trustee  credits  himself  as  custodian.  The  cash 
account  may  be  made  up  of  corpus,  income,  and  sales  of  real 
estate.  When  it  includes  income  or  sales  of  real  estate,  it  is 
to  be  credited  with  all  the  items  chargeable  to  them,  and  the 
proper  distributive  accounts  debited  with  the  same  items. 

ACTUAL    DISTRIBUTION. 

Debit  the  proper  distributive  account,  and  credit  the  proper 
custodian  account.  When  the  whole  of  the  personal  estate 
account  has  been  carried  to  the  distributive  accounts  and  the 
whole  of  the  custodian  accounts  transferred  to  the  distributive 
accounts,  the  custodian  accounts,  the  personal  estate  account, 
and  the  various  distributive  accounts  will  have  been  closed,  and 
the  trusteeship  ended. 

The  above  mode  of  keeping  trustee  accounts  is  that  of  double 
entry,  and  the  books  kept  as  posting  media  are  the  cash  book 
and  the  journal,  or  sometimes  only  a  journal;  the  book  in 
which  the  accounts  are  kept  is  the  ledger. 

LECTURE  III. 

GENERAL  SCHEME  OF   EXECUTOR^S  ACCOUNTS. 

It  is  not  in  the  power  of  an  executor  to  make  his  accounting 
in  what  ever  way  he  likes,  although  there  is  nothing  to  pre- 
vent him  from  keeping  his  accounts  as  he  desires.  For  this 
reason  it  is  well  to  keep  them  by  double  entry,  as  given  in  the 
last  lecture.  The  method  of  accounting  is  not  governed  by 
rigid  rules,  from  which  there  can  be  no  deviation,  but  it  must 


AND  Testamentary  Trustees.  15 

conform  to  certain  regulations.    The  method  may  be  deduced 
from  the  code  of  civil  procedure. 

Effect  of  Judicial  Settlement  of  Account.  Section  2742.  A 
judicial  settlement  of  the  account  of  an  executor  or  adminis- 
trator, either  by  the  decree  of  the  surrogate's  court,  or  upon 
an  appeal  therefrom,  is  conclusive  evidence  against  all  the 
parties  who  were  duly  cited  or  appeared  and  all  persons  deriv- 
ing title  from  any  of  them,  of  the  following  facts,  and  no 
others : 

1.  That  the  items  allowed  to  the  accounting  party  for 
money  paid  to  creditors,  legatees,  and  next  of  kin,  for  neces- 
sary expenses  and  for  his  services,  are  correct. 

2.  That  the  accounting  party  has  been  charged  with  all  the 
interest  for  money  received  by  him  and  embraced  in  the 
account  for  which  he  was  legally  accountable. 

3.  That  the  money  charged  to  the  accounting  party,  as 
collected,  is  all  that  was  collectible  at  the  time  of  the  settle- 
ment on  the  debts  stated  in  the  account. 

4.  That  the  allowances  made  to  the  accounting  party  for 
decrease,  and  the  charges  made  against  him  for  increase  in 
the  value  of  property,  were  correctly  made. 

Decree  for  Payment  and  Distribution.  Section  2743.  "Where 
an  account  is  judicially  settled,  as  prescribed  in  the  code,  and 
any  part  of  the  estate  remains  and  is  ready  to  be  distributed 
to  the  creditors,  legatees,  next  of  kin,  husband  or  wife  of  the 
decedent,  or  their  assigns,  the  decree  must  direct  the  payment 
and  distribution  thereof  to  the  persons  so  entitled,  according 
to  their  respective  rights.  In  case  of  administration  in  in- 
testacy, the  decree  must  direct  immediate  payment  and  dis- 
tribution to  creditors,  next  of  kin,  husband  or  wife  of  the 
decedent,  or  their  assigns,  where  the  administratfeb  has  peti- 
tioned voluntarily  for  judicial  settlement  of  his  account  as, 
and  in  the  case  provided  in  subdivision  2,  section  2728  of  this 
article. 

"Where  notice  requiring  all  persons  having  claims  against 
the  deceased  to  exhibit  the  same  with  the  vouchers  thereof  to 
the  executor  or  administrator  has  been  duly  published  ac- 
cording to  law,  if  one  of  two  or  more  co-executors,  or  co- 
administrators presents  his  account  and  a  petition  for  a  ju- 
dicial settlement  of  his  separate  account,  he  must  pray  that 
his  co-executors  or  co-administrators  may  also  be  cited.    Upon 


i6  Accounts  of  Executors 

the  presentation  of  account  and  a  petition,  as  prescribed  in  this 
section,  the  surrogate  must  issue  a  citation  accordingly.  On 
the  return  of  a  citation  issued  as  prescribed  in  this  section,  the 
surrogate  must  take  the  account,  and  hear  the  allegations  and 
proofs  of  the  parties  respecting  the  same.  Any  party  may 
contest  the  account,  with  respect  to  a  matter  affecting  his 
interest,  in  the  settlement  and  distribution  of  the  estate.  A 
creditor  or  a  person  interested  in  the  estate,  although  not 
cited,  is  entitled  to  appear  on  the  hearing  and  thus  make  him- 
self a  party  to  the  proceeding." 

The  effect  of  a  judicial  settlement,  as  given  in  section  2742, 
and  of  the  decree  for  payment  and  distribution,  as  given  in 
section  2743,  are  very  general  in  their  character,  yet  suffi- 
ciently explicit  to  be  a  guide  in  any  particular  case.  Different 
estates  present  different  features  and  details,  and  whatever 
these  may  be,  the  account  must  present  accurate,  full,  explicit 
and  definite  information  and  be  given  in  a  clear  and  lucid 
manner,  so  that  it  may  be  easily  understood  by  all  persons 
interested  in  it. 

It  is  to  be  remarked  that  the  accounting  before  the  surro- 
gate takes  cognizance  only  of  the  custodian  accounts,  and  these 
are  all  concrete  and  specific  in  their  character.  The  acts  of  a 
custodian  are  investive  and  divestive ;  he  debits  himself  with 
the  former  and  credits  himself  with  the  latter,  and  the  facts 
naturally  divide  his  account  into  these  two  parts.. 

But  the  account  proper  must  be  accompanied  by  schedules, 
given  to  classify  the  facts  which  enter  into  the  account,  and 
to  give  all  information  necessary  to  render  intelligible  the 
condition  of  the  estate.  Each  jurisdiction  may  frame  its  own 
form  for  the  contents  of  the  schedules,  and  the  presentation  of 
the  account,  but  the  various  forms  will  necessarily  amount 
to  the  same  thing.  The  following  is  the  substance  of  the  form 
used  in  the  County  of  New  York,  State  of  New  York : 

Preliminary :    The  date  of  filing  of  an  inventory  of  the  per- 
sonal property  of  the  deceased,  and  the  amount  of  it  as  fixed 
by  the  appraisers. 
Schedule  A. 

1.  Statement  of  personal  property  as  contained  in  inventory 
which  has  been  sold,  with  the  prices  and  manner  of  sale. 

2.  Statement  of  debts  due  estate  as  contained  in  inventory 
which  has  been  collected. 


AND  Testamentary  Trustees.  17 

3.     Statement  of  all  interest  of  money  received  by  executor 
for  which  he  is  legally  responsible. 
Schedule  B. 

1.  Statement  of  debts  mentioned  in  inventory  not  collected 
or  collectible  by  executor,  and  the  reason  why. 

2.  Statement  of  the  articles  of  personal  property  mentioned 
in  inventory  unsold,  and  the  reason  why;  and  their  appraised 
value. 

3.  A  statement  of  all  property  mentioned  therein  lost,  with- 
out fault  of  the  executor;  the  cause  of  loss  and  appraised 
value. 

4.  Statement  that  no  other  assets  than  those  in  inventory 
or  in  the  schedule  set  forth,  have  come  to  the  executor's  pos- 
session or  knowledge. 

5.  Statement  that  all  the  increase  or  decrease  of  the  values 
of  any  assets  of  deceased  is  allowed  or  charged  in  schedules 
A  and  B. 

Schedule  C. 

1.  Statement  of  all  moneys  paid  by  executor  for  funeral 
and  all  other  necessary  expenses^  together  with  the  reason  and 
object  of  such  expenditure. 

2.  Statement  of  the  date  when  executor  caused  a  notice  for 
claimants  to  present  their  claims  against  the  estate  to  executor 
at  a  certain  place  specified,  to  be  published  in  two  newspapers 
for  six  months,  pursuant  to  order  of  surrogate,  to  which  order, 
notice,  and  due  proof  of  publication  herewith  filed,  the  execu- 
tor refers  as  part  of  this  account. 

Schedule  D. 

1.  Statement  of  all  the  claims  of  creditors  presented  to  and 
allowed  by  executor  or  disputed  by  him,  and  for  which  a  judg- 
ment or  decree  has  been  rendered  against  him,  together  with 
the  names  of  the  claimants,  the  general  nature  of  the  claim, 
Its  amount,  and  the  time  of  the  rendition  of  the  judgment. 

2.  Statement  of  all  moneys  paid  by  executor  to  the  creditors 
of  the  deceased,  and  their  names ;  and  the  time  of  such  pay- 
ment. 

Schedule  E. 

Statement  of  all  moneys  paid  to  the   legatees,   widow   or 
next  of  kin  of  the  deceased. 
Schedule  F. 

Statement  of  the  names  of  all  persons  entitled  as  widow, 


1 8  Accounts  of  Executors 

legatee  or  next  of  kin  of  the  deceased,  to  a  share  of  his  estate, 
with  their  places  of  residence,  degree  of  relationship  and  a  state- 
ment of  which  of  them  are  minors,  and  whether  they  have  any 
general  guardian,  and  if  so  the  name  and  place  of  residence 
to  the  best  of  executor's  knowledge,  information  and  belief. 
Schedule  G. 

I.  Statement  of  all  other  facts  affecting  the  administration 
of  said  estate,  the  executor's  rights  and  those  of  others  inter- 
ested therein. 

In  these  schedules  we  have  all  the  materials  from  which  to 
make  the  account  proper.    It  runs  something  as  follows : 
I  charge  myself: 

With  amount  of  inventory  $ 

With  amount  of  increase  as  per  schedule  A      

With  amount  of  income  as  per  schedule  A        


I  credit  myself:  Total  charges 

With  amount  of  losses  on  sales 

as  per  schedule  B  

With    debts    not    collected    as 

per  schedule  B  

With    articles    mentioned    in 

said     inventory     unsold, 

schedule  B  

With    articles    mentioned    in 

said  inventory  lost,  sched- 
ule B  

With    funeral    expenses,    and 

other  expenses,  schedule  C 

With  money  paid  to  creditors 

as  per  schedule  D  

With  money  paid  to  legatees, 

widow,     or    next    of    kin, 

schedule  E  


Add  articles  unsold 
Add  debts  not  collected 


Total  to  be  distributed 


AND  Testamentary  Trustees.  19 

to   those   entitled  tliereto,   subject  to  the   deductions   of  the 
amount  of  commissions,  and  the  expenses  of  this  accounting. 

The  said  schedules,  which  are  severally  signed  by  me,  form 
part  of  this  account. 

All  of  which  is  respectfully  submitted. 
New  York. 

. . .  .day  of ,  1903.  ,  Executor. 

This  is  followed  by  the  decree  of  the  surrogate  giving  the 
distribution  of  all  the  assets  not  yet  distributed. 

LECTURE  IV. 
duties  of  surrogates  and  executors. 

The  class  of  trustees  which  we  shall  consider  is  the  class 
called  upon  to  administer  the  effects  of  a  decedent ;  viz.,  execu- 
tors, testamentary  trustees  and  administrators. 

An  executor  is  a  legal  administrator,  appointed  under  the 
will  of  the  personal  estate  of  a  deceased  person,  who  has  ac- 
cepted the  administration.  The  will  gives  the  title  to  the 
assets,  but  it  is  requisite  that  letters  testamentary  be  granted 
to  the  executors  in  order  to  give  them  such  legal  possession 
as  the  courts  will  uphold. 

If  there  is  no  will  or  trust  deed,  then  the  decedent  is  said 
to  die  intestate,  and  the  person  to  take  the  place  of  the  decedent 
in  appointing  persons  to  administer  the  estate,  is  called  surro- 
gate, i.  e.,  one  subrogated  to  the  rights  of  the  decedent,  in  ac- 
cordance with  the  powers  and  restrictions  conferred  on  him 
by  law. 

Administration  is  the  legal  right  to  settle  and  control  the 
estate  of  deceased  persons,  and  also  the  exercise  of  that  right. 
Letters  of  administration  are  the  warrant,  under  the  seal  of 
the  court,  giving  the  legal  right.  These  letters  are  of  three 
kinds : 

1.  Upon  the  goods,  the  chattels  and  credits  of  a  person 
(assets)  who  has  died  intestate. 

2.  Special  letters  of  administration,'  authorizing  the  ad- 
ministrator to  collect  and  preserve  the  estate,  either  of  a  testa- 
tor in  certain  cases,  or  of  an  intestate  (temporary  administra- 
tor). 


20  Accounts  of  Executors 

a.  When  there  is  a  contest  of  a  will. 

b.  Where  a  person  of  whose  estate  the  surrogate  would 
have  jurisdiction,  if  he  were  shown  to  be  dead,  disappears  or 
is  missing. 

3.  Letters  of  administration  authorize  the  person  ap- 
pointed by  the  court  in  place  of  an  executor  to  exercise  the 
powers  given  by  the  will  of  the  deceased,  called  letters  ^of 
administration  with  the  will  annexed. 

The  functions  of  a  surrogate  are: 

1.  To  take  the  proof  of  wills,  to  admit  wills  to  probate,  to 
revoke  the  probate  thereof,  and  to  take  and  to  revoke  probate 
of  heirship. 

2.  To  grant  and  revoke  letters  testamentary  and  letters  of 
administration,  and  to  appoint  a  successor  in  place  of  a  person 
whose  letter  has  been  revoked. 

3.  To  direct  and  control  the  conduct  and  settle  the  accounts 
of  executors,  administrators,  and  testamentary  trustees ;  to  re- 
move testamentary  trustees,  and  to  appoint  a  successor  in 
place  of  a  testamentary  trustee  so  removed. 

4.  To  enforce  the  payment  of  debts  and  legacies,  the  dis- 
tribution of  the  estate  of  decedents,  and  the  payment  or  de- 
livery by  executors,  administrators,  and  testamentary  trustees, 
of  money  or  other  property  in  their  possession,  belonging  to 
the  estate. 

5.  To  direct  the  disposition  of  real  propert}^  and  interest 
in  real  property  of  decedents,  for  the  payment  of  their  debts, 
and  funeral  expenses,  and  the  disposition  of  the  proceeds 
thereof. 

6.  To  administer  justice,  in  all  matters  relating  to  the 
affairs  of  decedents,  according  to  the  provisions  of  the  statutes 
relating  thereto. 

7.  To  appoint  and  remove  guardians  for  infants,  to  com- 
pel the  payment  and  delivery  by  them  of  money  or  other  prop- 
erty belonging  to  their  wards,  and  in  cases  specially  pre- 
scribed by  law  to  direct  and  control  their  conduct  and  settle 
their  accounts. 

Administration  in  case  of  intestacy  must  be  granted  to  the 
relatives  of  the  deceased  entitled  to  succeed  to  his  personal 
property  who  will  accept  the  same,  in  the  following  order : 

I.     To  the  surviving  husband  or  wife. 


AND  Testamentary  Trustees.  21 


To  the  children. 


To  the  father. 

To  the  mother. 

To  the  brothers. 

To  the  sisters. 

To  the  grandchildren. 

To  any  other  next  of  kin,  entitled  to  share  in  the  dis- 
tribution of  the  estate. 

9.  To  an  executor  or  administrator  of  a  sole  legatee  named 
in  a  will  whereby  the  whole  estate  is  devised  to  such  de- 
ceased sole  legatee. 

Letters  testamentary  and  letters  of  administration  relate  back 
to  the  time  of  the  decedent's  death  and  legalize  a  payment  to 
one  of  the  administrators  before  they  were  granted.  Executors 
may  be  appointed  by  implication,  and  are  then  called  executors 
according  to  the  tenor.  A  person  may  delegate  to  a  person 
designated  in  his  will  the  power  to  name  an  executor.  A  per- 
son named  as  executor  is  not  bound  to  accept  the  office;  he 
may  renounce,  provided  the  renunciation  is  made  before  he  has 
intermeddled  in  the  affairs  of  the  estate. 

The  duties  of  an  executor  are  the  following: 

1.  To  see  that  the  deceased  is  properly  buried,  incurring 
only  such  funeral  expenses  as  are  necessary  and  reasonable, 
having  regard  to  the  estate  and  social  standing  of  the  deceased. 

2.  To  have  the  will  probated,  paying  such  expenses  as  are 
necessary. 

3.  To  prepare  an  inventory,  and  have  the  same  duly  ap- 
praised. 

4.  To  realize,  collect,  and  get  in  the  estate  so  far  as  is  neces- 
sary. 

5.  To  pay  the  debts  of  the  deceased. 

6.  To  pay  the  legacies. 

7.  To  make  any  necessary  investments. 

8.  To  distribute  the  estate. 

9.  To  keep  such  accounts  as  will  show  how  the  estate  has 
been  administered. 

DEFINITION    OF    TERMS. 

I.  The  word  "intestate"  signifies  a  person  who  died  with- 
out leaving  a  valid  will ;  but  where  it  is  used  with  respect  to 


2  2  Accounts  of  Executors 

particular  property,  it  signifies  a  person  who  died  without 
effectually  disposing  of  that  property  by  will,  whether  he  left 
a  will  or  not. 

2.  The  word  "assets"  signifies  personal  property  applicable 
to  the  payment  of  the  debts  of  a  decedent. 

3.  The  words  "debts"  includes  every  claim  and  demand, 
upon  which  a  judgment  for  a  sum  of  money  or  directing  the 
payment  of  money  could  be  recovered  in  an  action;  and  the 
word  "creditor"  includes  every  person  having  such  a  claim  or 
demand,  any  person  having  a  claim  for  expenses  of  adminis- 
tration, or  any  person  having  a  claim  for  funeral  expenses. 

4.  The  word  "will"  signifies  a  last  will  and  testament,  and 
includes  all  the  codicils  to  a  will. 

5.  The  expression  "testamentary  trustee"  includes  every 
person,  except  an  executor  and  administrator  with  the  will 
annexed,  or  a  guardian,  who  is  designated  by  a  will  or  by  any 
competent  authority  to  execute  a  trust  created  by  a  will ;  and  it 
includes  such  an  executor  or  administrator,  where  he  is  acting 
in  the  execution  of  a  trust  created  by  the  will  which  is  separa- 
ble from  his  functions  as  executor  or  administrator. 

6.  The  expression  "letters  of  administration"  includes  let- 
ters of  temporary  administration. 

7.  The  word  "surrogate,"  where  it  is  used  in  the  text,  or  in 
a  bond  or  undertaking  given  pursuant  to  any  provision  of 
chapter  18,  article  3,  of  the  code  of  civil  procedure,  includes 
every  officer  or  any  court  vested  by  law  with  the  functions  of 
surrogate. 

8.  The  expression  "judicial  settlement",  where  it  is  applied 
to  an  account,  signifies  a  decree  of  a  surrogate  court,  whereby 
the  account  is  made  conclusive  upon  the  parties  to  the  special 
proceeding,  either  for  all  purposes,  or  for  certain  purposes 
specified  in  the  statutes ;  and  an  account  thus  made  conclusive 
is  said  to  be  judicially  settled. 

9.  The  expression  "intermediate  account"  denotes  an  ac- 
count filed  in  the  surrogate's  office,  for  the  purpose  of  disclos- 
ing the  acts  of  the  person  accounting,  and  the  condition  of 
the  estate  or  fund  in  his  hands  not  made  the  subject  of  a 
judicial  settlement. 

10.  The  expression  "upon  the  return  of  a  citation"  where 
it  is  used  in  a  provision  requiring  an  act  to  be  done  in  the 


AND  Testamentary  Trustees.  23 

surrogate's  court,  relates  to  the  time  and  place  at  which  the 
citation  is  returnable,  or  to  which  the  hearing  is  adjourned; 
includes  a  supplemental  citation,  issued  to  bring  in  a  party  who 
ought  to  be,  but  who  has  not  been  cited ;  and  implies  that  before 
doing  the  act  specified,  due  proof  must  be  made  that  all  persons 
required  to  be  cited  have  been  duly  cited. 

11.  The  expression  "person  interested",  where  it  is  used 
in  connection  with  the  estate  or  fund,  includes  every  person 
entitled  either  absolutely  or  contingently  to  share  in  the  estate 
or  the  proceeds  thereof,  or  in  the  fund,  as  husband,  wife, 
legatee,  next  of  kin,  heir,  devisee,  assignee,  grantee,  or  other- 
wise, except  as  a  creditor.  Where  a  provision  prescribes  that 
a  person  interested  may  object  to  an  appointment,  or  may  apply 
for  an  inventory,  an  account,  or  increased  security,  an  allega- 
tion of  his  interest,  duly  verified,  suffices,  although  his  inter- 
est is  disputed;  unless  he  has  been  excluded  by  a  judgment, 
decree  or  other  final  determination  and  no  appeal  therefrom  is 
pending. 

12.  The  term  "next  of  kin",  includes  all  those,  other  than 
a  surviving  husband  or  wife,  entitled  under  the  provisions  of 
the  law  relating  to  the  distribution  of  personal  property  to 
share  in  the  unbequeathed  residue  of  the  assets  of  a  decedent 
after  the  payment  of  debts  and  expenses. 

13.  The  expression  "real  property"  includes  every  estate, 
interest  and  right,  legal  or  equitable,  in  lands,  tenements,  or 
hereditaments,  except  those  which  are  determined,  or  distin- 
guished by  the  death  of  a  person  seized  or  possessed  thereof,  or 
in  any  manner  entitled  thereto,  and  except  those  which  are  de- 
clared by  law  to  be  assets.  The  word  "inheritance"  signifies 
real  property,  as  defined  in  this  subdivision,  descended  as  pre- 
scribed by  law.  The  expression  "personal  property"  signifies 
every  kind  of  property  which  survives  a  decedent  other  than 
real  property,  as  defined  in  this  subdivision,  and  includes  a  right 
of  action  conferred  by  special  statutory  provision  upon  execu- 
tor or  administrator. 

We  will  now  consider  in  order  the  executor's  duties. 

I.  To  see  that  the  deceased  is  properly  buried.  Anyone 
performing  the  Christian  services  of  burying  a  deceased  per- 
son will  be  allowed  reasonable  funeral  expenses  out  of  the 
estate,  without  reference  to  the  rights  of  next  of  kin  or  credi- 


24  Accounts  of  Executors 

tors,  and  in  preference  to  their  claims.  An  executor  can  even 
before  probate  dispose  of  assets  to  pay  funeral  expenses.  These 
expenses  seem  to  include  expenses  incurred  for  medical  attend- 
ance and  others  of  like  kind. 

For  the  purpose  of  preserving  the  property  of  his  testator 
he  may,  though  he  is  not  bound  to  do  so,  take  it  into  his  own 
possession,  and  for  that  purpose  may  peacefully  enter  into  the 
house  of  the  heir  where  the  effects  may  be  and  take  them. 
And  when  the  effects,  at  the  decease  of  his  testator,  are  in 
possession  of  parties  not  interested  in  the  preservation  of  them,, 
there  can  be  no  doubt  of  the  duty  of  an  executor  to  take  and 
properly  care  for  them. 

II.  Proof  of  Will.  The  application  for  proof  of  will  may 
be  made  by  an  executor,  devisee  or  legatee  named  therein  or  by 
any  person  interested  in  the  estate  of  deceased.  The  petition 
for  proof  should  therein  show : 

1.  The  residence  of  testator  and  his  death: 

(a)  That  he  was  an  inhabitant  of  the  county  of  the  surrogate ; 

(b)  That  not  being  an  inhabitant  of  the  state,  he  died  in  the 
county  of  such  surrogate,  leaving  assets  therein ; 

(c)  That  not  being  an  inhabitant  of  the  state,  he  died  out  of 
the  state,  leaving  assets  in  the  county  of  such  surrogate. 

(d)  That  not  being  an  inhabitant  of  the  state,  he  died  out  of 
the  state,  not  leaving  assets  therein,  but  the  assets  of  such 
testator  have  since  his  death  come  into  the  county  of  such 
surrogate ;  or 

(e)  That  some  real  estate  devised  by  testator  is  situated  in 
the  county  of  such  surrogate,  and  no  other  surrogate  has 
gained  jurisdiction  under  any  of  the  preceding  clauses ; 

2.  That  he  left  a  last  will  and  testament,  with  the  de- 

scription of  it,  if  not  produced  with  the  petition. 

3.  That  it  relates  to  real  or  personal  property  or  both. 

4.  The  heirs  at  law,  or  the  widow  and  next  of  kin  of 
the  testator,  or  that  the  same  cannot,  after  diligent 

inquiry,  be  ascertained. 

5.  A  prayer  for  the  issuing  a  citation  requiring  the 
heirs  at  law,  or  the  widow  and  next  of  kin,  or  all 
of  them  to  appear  and  attend  the  probate  of  the 
will. 

The  heirs  of  a  deceased  person  are  those  who  would  sue- 


AND  Testamentary  Trustees.  25 

ceed  to  real  estate  under  the  statute  in  relation  to  descent,  and 
are: 

1.  His  children  lawfully  begotten,  if  he  have  any,  and  the 
children  of  such  as  shall  have  died. 

2.  His  father  if  he  be  living. 

3.  His  mother  if  she  be  living,  or 

4.  His  collateral  relatives. 
The  next  of  kin  are : 

1.  The  children  and  descendants. 

2.  The  father. 

3.  The  mother  and  brothers  and  sisters,  and  the  legal  repre- 
sentatives of  such  as  shall  have  died. 

4.  His  collateral  relatives,  not  beyond  brothers'  and  sisters' 
children. 

The  heirs  at  law  and  next  of  kin  of  an  illegitimate  are : 

1.  His  descendants. 

2.  His  mother. 

3.  His  relatives  on  the  part  of  his  mother. 

It  is  not  necessary  to  enter  into  the  details  of  proving 
the  will,  but  only  to  remark  that  the  expenses  of  the  executor 
or  other  person  who  shall  serve  the  citation,  will  be  allowed  as 
part  of  the  expenses  of  administration,  without  regard  to  credi- 
tors, as  well  as  the  expenses  of  advertising  in  the  newspapers. 
If  there  arises  a  contention  in  the  proof  of  the  will,  delaying 
the  proof,  it  may  be  necessary  for  the  surrogate  to  appoint  a 
temporary  or  special  administration  ad  colligendum,  that  is  for 
the  purpose  of  collecting,  etc. 


LECTURE  V. 

executor's  inventory. 

III.  To  prepare  an  inventory  and  have  the  same  duly  ap- 
praised. On  application  of  an  executor  or  administrator,  the 
surrogate  by  writing  must  appoint  two  disinterested  appraisers, 
as  often  as  may  be  necessary,  to  appraise  the  personal  property 
of  a  deceased  person.  They  shall  be  entitled  to  receive  a  rea- 
sonable compensation  for  their  services,  to  be  allowed  by  the 
surrogate,  not  exceeding  for  each  the  sum  of  five  dollars  for 


26  Accounts  of  Executors 

each  day  actually  employed  in  making  appraisement,  in  addition 
to  expenses  actually  and  necessarily  incurred.  The  number  of 
days'  service  rendered  and  the  amount  of  such  expenses  must 
be  verified  by  the  affidavit  of  the  appraiser,  delivered  to  the 
executor  or  administrator,  and  adjusted  by  the  surrogate  before 
payment  of  his  fees. 

The  executors  and  administrators,  within  a  reasonable  time 
after  giving  a  notice  of  at  least  five  days  to  the  legatees  and 
next  of  kin  residing  in  the  county  where  the  property  is  situ- 
ated, and  posting  a  notice  in  three  of  the  most  public  places  of 
the  town,  specifying  the  time  and  place  at  which  the  appraise- 
ment will  be  made,  must  make  a  true  and  perfect  inventory  of 
all  the  personal  property  of  the  testator  or  intestate,  and  if  in 
different  and  distinct  places  two  or  more  such  inventories,  as 
may  be  necessary.  Before  making  the  appraisement,  the  ap- 
praisers must  take  and  subscribe  an  oath  to  be  inserted  in  the 
inventory,  that  they  will  truly,  honestly,  and  impartially  ap- 
praise the  personal  property  exhibited  to  them,  according  to 
the  best  of  their  knowledge  and  ability.  They  must,  in  the 
presence  of  such  of  the  parties  interested  as  attend,  estimate 
and  appraise  the  property  exhibited  to  them,  and  set  down 
each  article  separately  with  the  value  thereof  in  dollars  and 
cents  distinctly  in  figures  opposite  to  the  articles  respectively. 

WHAT  SHALL  BE  DEEMED  ASSETS. 

The  following  shall  be  deemed  assets  and  go  to  the  executors 
or  administrators,  to  be  applied  and  distributed  as  part  of  the 
personal  property  of  the  testator  or  intestate,  and  be  included 
in  the  inventory: 

A.  Leases  for  years,  lands  held  by  the  deceased  from  year 
to  year,  and  estates  held  by  him  for  the  life  of  another  person. 

The  first  division  of  assets  relates  to  active  leases.  They 
may  be  called  active  because  they  are  at  the  present  time  bearing 
fruit ;  i.  e.,  yielding  rent  to  the  estate  of  the  decedent.  They  are 
personal  property  because  the  rights  under  them  are  less  than 
property  in  fee  or  freehold.  It  is  very  difficult  to  tell  how 
the  ordinary  appraisers  put  a  value  on  these  leases;  but  the 
true  value  of  assets  of  this  nature  must  depend  on  the  net  in- 
come derivable  therefrom,  according  to  the  best  estimate  of 


AND  Testamentary  Trustees.  27 

the  same,  considered  in  relation  to  the  time  the  income  will 
last 

They  may  be  converted  into  cash  by  sale,  or  kept  intact  and 
turned  over  to  the  next  of  kin  at  the  termination  of  the  execu- 
torship or  testamentary  trusteeship,  or  they  may  lapse,  the  term 
having  run  out.  If  the  profits  from  them,  either  real  or  esti- 
mated, exceed  the  disbursements  incurred  in  consequence  of 
holding  them,  then  they  have  a  value,  but  if  the  disbursements 
exceed  the  profits  from  them,  then  they  are  an  obligation  upon 
the  estate. 

Ai.  Leases  for  years.  These  are  leases  held  by  the  decedent 
at  the  time  of  his  death  and  are  terminable  at  some  certain 
future  date.  If  we  subtract  the  sum  of  the  annual  disburse- 
ments, certain  and  estimated,  on  account  of  property  covered 
by  lease,  from  the  estimated  gross  annual  returns  from  said 
property,  we  obtain  the  net  yearly  estimated  value  of  the  prop- 
erty of  the  estate  of  the  decedent.  This  estimated  net  annual 
value  of  the  lease  is  an  annuity,  and  the  annuity  will  last  for  the 
time  of  the  lease.  With  money  at  say  6%  per  annum  (for  a 
high  rate  covers  risks  pertaining  to  lease),  the  present  value 
of  such  an  annuity  will  give  the  value  of  the  lease.  The 
present  value  may  be  calculated  either  by  an  algebraical  for- 
mula, or  obtained  from  a  table  of  the  present  value  of  an  an- 
nuity of  $1  per  annum,  and  is  then  often  called  the  number 
of  years'  purchase,  for  the  reason  that  the  net  annual  annuity 
multiplied  by  the  number  of  years  will  give  the  present  value 
of  the  lease. 

We  will  now  give  a  few  examples  of  the  valuation  of  leases 
for  years : 

Example  i.     When  the  lessee  has  leased  the  term  of  his  lease 
at  an  improved  rent. 

The  lease  has  13  years  to  run,  subject  to  landlord's  rent  of 
$500,  average  annual  taxes  $250,  average  repairs  and  main- 
tenance $250.    It  yields  an  annual  rent  of  $1,500,  money  being 
considered  to  yield  for  such  property  6%  per  annum. 
Estimated  annual  outlay,  $500+$25o-|-$25o=$i,ooo. 
Estimated  net  annual  return,  $1,500 — $i,ooo=:$500. 

By  annuity  table  showing  present  value  of  $1  per  annum  for 
13  years  at  6%  per  annum,  we  obtain  8.85  years'  purchase,  and 
$500X8.85 =$4,425,  present  value  of  lease. 


28  Accounts  of  Executors 

Example  2.     Take  the  same  as  in  last  example,  but  subject 
to  rent  charge  of  $100  per  annum  for  10  years. 
At  6%  per  annum  this  gives  7.36  years'  pur- 
chase,  and   $iooX7-36=$736,   value   of   rent 
charge. 
Therefore  value  of  lease,  $4,425 — $736=$3,689. 
Example  3.     A  tenant  hires  property  for  $1,000  per  annum 
for  21  years,  the  tenant  to  pay  taxes  and  make 
all  repairs.    The  landlord  agrees  at  the  end  of 
the   lease  to  pay   for   contemplated   improve- 
ments $4,000.     The  property  is  rented  at  an 
improved  rent  of  $5,000. 
What  is  the  value  of  the  lease  having  10  years  yet  to  run,  the 
average  yearly  taxes  being  $800,  insurance  $240,  the  repairs, 
maintenance,  cost  of  collecting  rent,  and  risk  of  losses  on  col- 
lections being  estimated  at  $1,000,  with  money  at  4%  for  this 
kind  of  property  ? 

The  present  value  of  $1  due  in  10  years  at  4%  is  .675564. 
The  present  value  of  improvements,  $4,000,  is 

$4,oooX.675564=$2,702.256 
Annual   disbursements,   $iooo-f$8oo+$iooo+$240=$3040 
Net  rent  receivable  on  lease,  $5000 — $3040=1960. 
Ten  years'  annuity  at  4%  gives  8.1 1  years'  purchase. 
Value  of  lease  without  improvements,      $1960X8.11 

==$15895.60 
Value  of  lease  with  improvements,  $i5895.6o+$2702.26 

=$18597.86 
A2.  Leases  from  year  to  year.  These  leases  occur  when 
a  tenant  has  had  a  lease  for  a  number  of  years,  and  does  not 
renew  it,  but  continues  in  possession  on  terms  like  those  in 
the  original  lease,  except  as  to  the  term  of  the  lease.  They 
can  be  terminated  at  the  end  of  any  year.  They  do  not  seem 
to  be  assignable.  In  giving  their  value  they  can  only  be  esti- 
mated as  a  one-year  lease. 

A3.  Estates  held  by  decedent  for  the  life  of  another  per- 
son. These  are  treated  in  the  same  way  as  leases  for  a  term  of 
years  except  that  the  number  of  years'  purchase  the  lease  is 
worth  is  obtained  from  a  table  of  net  life  annuities.  For  ex- 
ample, the  number  of  years'  purchase  of  an  annuity  of  $1  for 
a  person  aged  74  at  4%  is  5.124;  of  a  person  aged  15,  it  is 


AND  Testamentary  Trustees.  29 

19.403 ;  of  a  person  aged  44  it  is  14.159.  The  present  value 
of  a  net  income  of  $1000  of  a  person  aged  44:  $1000X14.159 
=$14159. 

B.  The  interest  in  any  lease  remaining  in  the  estate  of 
the  decedent  at  the  time  of  his  death  for  a  term  of  years  after 
the  expiration  of  any  sub-lease  granted  by  him  to  any  other 
person. 

We  will  illustrate  this  condition  thus: — A,  the  decedent, 
obtained  a  lease  of  a  piece  of  property  for  21  years;  immedi- 
ately he  made  a  lease  of  the  same  to  B  for  a  term  of  10  years ; 
5  years  of  B's  lease  had  elapsed  when  A  died. 

B's  lease  has  now  5  years  to  run  before  the  property  reverts 
to  the  estate  of  A.  The  estate  has  an  interest  in  the  property, 
which  after  5  years  will  continue  for  11  years.  This  is  called 
a  deferred  annuity. 

Suppose  the  net  annual  income  of  this  property  is  $1200. 
The  lease  has  16  years  to  run,  the  number  of  years'  purchase 
for  16  years  say  at  4%  is  by  table  11.65.  The  lease  has  5  years 
to  run  before  it  reverts  to  A's  estate,  and  the  number  of  years' 
purchase  for  5  years  at  4%  is  4.45.  Therefore  the  number  of 
years'  purchase  for  the  last  11  years  is  11.65  —  445=7-20. 
Value  of  lease,  $i,2ooX7.20=$8640. 

C.  The  interest  in  lands  devised  to  an  executor  for  a  term 
of  years  for  the  payment  of  debts. 

This  is  not  a  lease  for  a  term  of  years ;  but  it  is  the  case  of  a 
lessee  in  possession  of  a  lessor's  lease  as  security  for  the  pay- 
ment of  a  debt.  The  value  of  this  is  the  debt  unpaid,  but  it  is 
not  carried  out  by  the  United  States  Rule  for  partial  pay- 
ments. Instead,  receipts  from  rents,  etc.,  are  applied  in  reduc- 
tion of  capital  until  the  debt  is  paid,  and  then  to  interest  due. 
(In  matter  of  Tietgen,  5  Dem.  350.) 

D.  Things  annexed  to  the  freehold  or  to  any  building  for 
the  purpose  of  trade  or  manufacture,  and  not  fixed  into  the 
wall  of  a  house  so  as  to  be  essential  to  its  support.  These  are 
called  trade  fixtures  or  tenant  fixtures. 

E.  The  crops  growing  on  the  land  of  deceased  at  the  time 
of  his  death. 

F.  Every  kind  of  produce  raised  annually  by  labor  and  cul- 
tivation, except  grass  growing  and  fruit  not  gathered. 

(Items  E  and  F  separate  the  produce  which  is  the  result  of 


30  Accounts  of  Executors 

labor  and  cultivation  from  that  which  is  purely  due  to  the 
efforts  of  nature.) 

G.  Rents  reserved  to  the  deceased  which  had  accrued  at 
the  time  of  his  death.  (Accrued  here  is  interpreted  '*in  ar- 
rears".) 

Of  course  rents  in  arrears  are  personal  property,  being 
merely  debts  which  had  become  due  but  had  not  been  paid. 

H.  Debts  secured  by  mortgages,  bonds,  notes  or  bills,  ac- 
counts, moneys  and  bank-bills  or  other  circulating  medium, 
things  in  action,  and  stocks  in  any  corporation  or  joint  associa- 
tion.   These  are  documentary  assets. 

I.  Goods,  wares,  merchandise,  utensils,  furniture,  cattle, 
provisions,  moneys  unpaid  on  contracts  for  sale  of  land,  and 
every  other  species  of  personal  property.  These  are  tangible 
assets.  These,  I  am  inclined  to  think,  should  be  valued  on  the 
principle  of  replacement,  modified  by  wear  and  tear. 

section   2714  OF   CODE  OF  CIVIL  PROCEDURE. 

"The  inventory  must  contain  a  particular  statement  of  all 
bonds,  mortgages,  notes,  and  other  securities  for  the  payment 
of  money  belonging  to  the  deceased,  known  to  the  executor  or 
administrator;  with  the  name  of  the  debtor  in  each  security, 
the  date,  the  sum  originally  payable ;  the  indorsements  thereon, 
if  any,  with  their  dates,  and  the  sum  which  in  the  judgment  of 
the  appraisers  is  collectible  on  each  security ;  and  of  all  moneys, 
whether  in  specie  or  bank  bills,  or  other  circulating  medium 
belonging  to  the  deceased,  which  have  come  to  the  hands  of 
the  executor  or  administrator ;  and  if  none  have  come  into  his 
hands,  the  fact  shall  be  stated  in  the  inventory.  The  naming 
of  a  person  executor  in  a  will  does  not  operate  as  a  discharge 
or  bequest  of  any  just  claim  which  the  testator  had  against 
him;  but  it  must  be  included  among  the  credits  and  effects 
of  the  deceased  in  the  inventory,  and  the  executor  shall  be  lia- 
ble for  the  same  as  for  so  much  money  in  his  hands  at  the 
time  the  debt  or  demand  becomes  due,  and  he  must  apply  and 
distribute  the  same  in  the  payment  of  debts  and  legacies,  and 
among  the  next  of  kin,  as  part  of  the  personal  property  of  the 
deceased.  The  discharge  or  bequest  in  a  will  of  a  debt  or  de- 
mand of  the  testator  against  an  executor  named  therein,  or 


AND  Testamentary  Trustees.  31 

against  any  other  person,  is  not  valid  as  against  the  creditors 
of  the  deceased,  but  must  be  construed  as  only  a  specific  be- 
quest of  such  debts  or  demand;  and  the  amount  thereof  must 
be  included  in  the  inventory,  and,  if  necessary,  be  applied  in 
the  payment  of  his  debts ;  and  if  not  necessary  for  that  pur- 
pose, must  be  paid  in  the  same  manner  and  proportion  as 
other  specific  legacies.  If  personal  property  not  mentioned 
in  any  inventory  come  to  the  possession  or  knowledge  of  an 
executor  or  administrator,  he  must  cause  the  same  to  be  ap- 
praised as  herein  required,  and  an  inventory  thereof  to  be  re- 
turned within  two  months  after  the  discovery  thereof,  and 
the  making  of  such  inventory  and  return  may  be  enforced 
in  the  same  manner  as  in  the  case  of  a  first  inventory." 

Upon  the  completion  of  the  inventory  duplicates  must  be 
made  and  signed  by  the  appraisers,  one  of  which  must  be  re- 
tained by  the  executor  and  the  other  returned  to  the  surrogate's 
office  within  three  months  of  the  date  of  grant  of  the  letters 
testamentary. 

The  inventory  is  prima  facie  evidence  of  the  value  of  the 
estate.  Any  increase  over  the  values  therein  stated  belongs 
to  the  estate  and  any  decrease  must  be  explained  in  the  ac- 
counting. 

An  executor  should  supply  himself  with  a  true  copy  of  the 
will  when  he  enters  on  his  duties,  and  he  should  carefully 
follow  its  directions  in  the  exercise  of  his  duties,  looking  for 
advice  to  his  attorney  on  all  points  which  are  not  easily  under- 
stood by  himself. 

Unless  real  estate  is  devised  to  an  executor  in  trust,  the  heir 
or  devisee  is  the  only  person  who  has  the  right  to  its  posses- 
sion, except  where  it  may  be  required  to  pay  debts  of  the 
decedent,  and  the  executor  as  such  has  no  control  over  it;  he 
receives  his  authority  from  the  will  or  statute. 

The  title  to  real  estate  will  vest  in  a  testamentary  trustee, 
and  he  is  accountable  for  the  proceeds  of  such  real  estate  upon 
a  sale,  but  he  should  not  make  such  sales  without  first  con- 
sulting his  attorney. 

IV.    To  Realize,  Collect,  and  Get  in  the  Estate. 

If  an  executor  or  administrator  discover  that  the  debts 
against  any  deceased  person  and  the  legacies  bequeathed  by 


32  Accounts  of  Executors 

him  cannot  be  paid  and  satisfied  without  a  sale  of  the  per- 
sonal property  of  the  deceased,  the  same,  so  far  as  may  be 
necessary  for  the  payment  of  such  debts  and  legacies,  must  be 
sold  (see  section  2717). 

The  executor  so  far  is  a  person  of  inherence,  that  is,  the 
property  inheres  in  him,  or  he  is  considered  the  owner  who  is 
given  the  legal  right  to  obtain  the  possession  of  it. 


LECTURE  VI. 

DISTRIBUTION  OF  ASSETS  AND  PRINCIPLES  OF  BOOKKEEPING. 

Next  after  gathering  together  the  assets,  the  executor  should 
distribute  the  same  according  to  the  last  will  and  testament 
modified  by  law.  However,  the  will  is  the  chief  directing 
power  so  long  as  it  is  able,  according  to  law,  to  be  the  execu- 
tor's guide. 

In  the  distribution  the  executor  must  fortify  himself  with 
the  vouchers.  On  an  accounting  by  an  executor  or  adminis- 
trator, the  accounting  party  must  file  a  voucher  for  every  pay- 
ment, excepting  in  one  of  the  following  cases : 

1.  For  any  proper  item  of  expenditure  not  exceeding  $20, 
if  it  is  supported  by  his  own  uncontradicted  oath,  stating  posi- 
tively the  fact  of  the  payment,  and  when  and  to  whom  the  pay- 
ment was  made ;  but  all  the  items  so  allowed  aggiinst  an  estate 
shall  not  exceed  $500. 

2.  If  he  proves  by  his  own  oath,  or  another's  testimony, 
that  he  did  not  take  a  voucher  when  payment  was  made;  or 
that  the  voucher  then  taken  has  been  lost  or  destroyed,  he 
may  be  allowed  any  item  the  payment  of  which  is  satisfactorily 
proved  by  the  testimony  of  the  person  to  whom  he  made  it; 
or  if  that  person  be  dead  or  cannot  after  diligent  search  be 
found,  by  any  competent  evidence,  other  than  his  own  oath, 
unless  the  surrogate  is  satisfied  that  the  charge  is  correct  and 
just. 

The  payments  to  be  made  by  an  executor  may  be  for  the 
following  purposes : 

1.  Funeral  expenses. 

2.  Expenses  of  administration  of  the  corpus  of  the  estate. 

3.  Expenses  attending  income  arising  out  of  the  estate. 


AND  Testamentary  Trustees.  33 

4.  Payments  of  decedent's  debts. 

5.  Payments  of  legacies. 

6.  Payment  of  income  to  beneficiaries,  if  within  the  execu- 
tor's scope  of  duties. 

7.  Payment  to  residuary  legatees  or  to  next  of  kin. 

Of  course  no  profit  may  be  made  by  an  executor  or  admin- 
istrator, by  the  increase,  nor  shall  he  sustain  any  loss  by  the 
decrease  without  his  fault,  of  any  part  of  the  estate;  but  he 
shall  account  for  such  increase,  and  be  allowed  for  such  de- 
crease on  the  settlement  of  the  account,  and  the  surrogate  may 
allow  the  accounting  party  for  property  of  the  decedent,  per- 
ished or  lost,  without  the  fault  of  the  accounting  party. 

The  increase  to  which  I  have  just  referred  will  go  to  the 
increase  of  the  assets,  principal  or  corpus  of  the  estate,  and  the 
decrease  go  to  the  decrease  of  the  assets  of  the  estate,  whether 
the  decrease  be  due  to  reduction  in  value  on  realization,  or 
perishing  or  loss  of  assets.  Yet  the  executor  is  bound  to  take 
all  reasonable  care  of  the  property,  and  hence  such  assets  as 
are  subject  to  loss  by  fire  should  be  insured,  and  unless  it 
is  a  producing  asset,  the  premium  should  be  charged  to  the 
corpus  of  the  estate;  but  if  a  producing  asset,  to  the  income 
which  is  going  to  beneficiaries. 

We  will  now  consider  the  disbursements  in  their  order: 

I.     Funeral  expenses.    So  long  as  these  are  reasonable,  and 
becoming  the  condition  of  the  estate  of  decedent,  they  will  be 
allowed  and  are  chargeable  to  corpus  of  the  estate. 
^^  2.^    Exj^nses  of  administration,  except  such  as  are  directly 
^n^med  with  income,  are  chargeable  to  corpus  of  estate. 

3.  Expenses  concerned  with  income  are  to  be  taken  out 
of  income. 

4.  Payment  of  decedent's  debts.  In  payment  of  these  two 
things  have  to  be  noticed : — 

A.  Ascertainment  of  debts. 

B.  Order  of  payments. 

I.  Ascertainment  of  debts.  The  executor  or  administrator,  at 
any  time  after  the  granting  of  the  letters,  may  insert  a  notice, 
once  each  week  for  six  months,  in  such  newspaper  or  news- 
papers printed  in  the  county  as  the  surrogate  directs,  requiring 
all  persons  having  claims  against  the  deceased  to  exhibit  the 
same,  with  the  vouchers  therefor,  to  him  at  a  place  to  be  speci- 


34  Accounts  of  Executors 

fied  in  the  notice,  at  or  before  a  day  therein  named,  which  must 
be  at  least  six  months  from  the  day  of  the  first  pubHcation 
of  the  notice.  The  executor  or  administrator  may  require  satis- 
factory vouchers  in  support  of  any  claim  presented,  and  the 
affidavit  of  the  claimant  that  the  claim  is  justly  due,  that  no 
payments  have  been  made  thereon  and  that  there  are  no  offsets 
against  the  same  to  the  knowledge  of  the  claimant.  If  a  suit 
be  brought  on  a  claim  which  is  not  presented  to  the  executor 
or  administrator  within  six  months  from  the  first  publication 
of  such  notice,  the  executor  or  administrator  shall  not  be 
chargeable  for  any  assets  or  moneys  that  he  may  have  paid  in 
satisfaction  of  any  lawful  claims  or  of  any  legacies,  or  in  mak- 
ing distribution  to  the  next  of  kin  before  such  suit  was  com- 
menced. 

2.     The  order  of  payments : — 

Every  executor  and  administrator  must  proceed  with  dili- 
gence to  pay  the  debts  of  the  deceased,  according  to  the  follow- 
ing order : 

1.  Debts  entitled  to  a  preference  under  the  laws  of  the 
United  States.  Since  the  repeal  of  the  inheritance  law  the  only 
important  one  is  the  bond  given  to  pay  duties. 

2.  Taxes  assessed  on  the  property  of  the  deceased  during 
his  lifetime;  but  taxes  assessed  on  real  estate  subsequent  to 
his  death  are  not  to  be  paid  by  an  executor  or  administrator 
as  such.  It  belongs  to  the  testamentary  trustee  »to  pay  them. 
Hence  there  may  arise  a  question  when  they  are  assessed.  In 
New  York  City,  the  time  seems  to  be  when  the  books  are 
delivered  into  the  hands  of  the  receiver  of  taxes  for  collection. 

3.  Judgments  docketed  and  decisions  entered  against  the 
deceased  according  to  the  priority  thereof  respectively. 

4.  All  recognizances,  bonds,  sealed  instruments,  notes,  bills 
and  unliquidated  demands  and  accounts. 

Each  class  is  entitled  to  payment  in  full  before  any  pay- 
ments can  be  made  upon  a  debt  of  a  subsequent  class. 

Preference  shall  not  be  given  in  the  payment  of  a  debt  over 
other  debts  of  the  same  class,  except  those  specified  in  the  third 
class.  A  debt  due  and  payable  shall  not  be  entitled  to  a  prefer- 
ence over  debts  not  due;  nor  shall  the  commencement  of  a 
suit  for  the  recovery  of  a  debt,  or  the  obtaining  of  a  judgment 
thereon  remove  the  debt  from  class  four  (4)  to  class  three  (3). 


AND  Testamentary  Trustees.  35 

Debts  not  due  may  be  paid,  according  to  the  class  to  which  they 
belong,  after  deducting  a  rebate  of  legal  interest  on  sum  paid 
for  the  unexpired  term  of  credit.  An  executor  or  administra- 
tor shall  not  satisfy  his  own  debt  or  claim  out  of  the  property 
of  the  deceased,  until  proved  to,  or  allowed  by,  the  surrogate ; 
and  it  shall  not  have  the  preference  over  others  of  the  same 
class.  Preference  may  be  given  by  the  surrogate  to  rents  due 
or  accruing  on  leases  held  by  the  testator  or  intestate  at  the 
time  of  his  death  over  debts  of  the  fourth  class,  if  it  appears 
to  his  satisfaction  that  such  preference  will  benefit  the  estate 
of  the  testator  or  intestate. 

Rents,  annuities  and  dividends  shall,  on  the  death,  or  other 
sooner  determination  of  the  beneficiary  therein,  be  appor- 
tioned so  that  he  or  his  executors,  administrators  or  assigns, 
shall  be  entitled  to  a  proportion  of  such  rents,  annuities,  divi- 
dends, or  other  payments  of  like  nature,  according  to  the  time 
which  shall  have  elapsed  from  the  commencement  or  last 
period  of  payment  thereof,  as  the  case  may  be,  including  the 
day  of  the  death  of  such  person  or  of  the  determination  of  his 
interest,  after  making  allowance  and  deductions  on  account 
of  charges  on  such  rents,  annuities,  dividends  and  other  pay- 
ments. Every  such  person  or  his  executors,  administrators 
or  assigns  shall  have  the  same  remedies  at  law  and  in  equity 
for  recovering  such  apportioned  parts  of  such  rents,  annuities, 
dividends  or  other  payments,  when  the  entire  amount  of  which 
such  apportioned  parts  form  part,  become  due  and  payable,  and 
not  before,  as  he  or  they  would  have  had  for  recovering  and 
obtaining  such  entire  rents,  annuities,  dividends  and  other  pay- 
ments, if  entitled  thereto;  but  the  persons  liable  to  pay  rents 
reserved  by  any  lease  or  demise,  or  the  real  property  comprised 
therein,  shall  not  be  resorted  to  for  such  apportioned  part,  but 
the  entire  rents  of  which  such  apportioned  parts  form  parts 
must  be  collected  and  recovered  by  the  person  or  persons  who 
but  for  this  section  would  have  been  entitled  to  the  entire  rents  ; 
and  such  portions  shall  be  recoverable  from  such  person  or 
persons  by  the  parties  entitled  to  the  same. 

An  assessment  confirmed  at  the  time  of  testator's  decease, 
although  a  lien  upon  the  real  estate,  is  also  a  debt  to  be  paid  out 
of  the  personal  estate,  but  in  the  fourth  class. 

Foreign  judgments  do  not  belong  to  the  third  class,  but  to 
the  fourth  class. 


$6  Accounts  of  Executors 

Mortgages  cannot  be  paid  out  of  the  personal  estate,  unless 
so  provided  by  will,  in  which  case  they  belong  to  the  fourth 
class. 

Where  a  creditor  has  additional  security,  he  should  first  ex- 
haust that  security  and  only  have  recourse  to  the  personal  prop- 
erty for  deficiency. 

Creditors  of  an  insolvent  partnership,  in  case  of  the  death 
of  one  of  the  partners,  cannot  collect  their  debts  against  the 
separate  estate  of  the  decedent  until  his  individual  liabilities 
shall  have  been  paid  in  full. 

A  voluntary  bond  of  the  testator  given  in  his  lifetime,  pay- 
able at  or  immediately  after  his  death,  is  a  valid  debt,  and  has 
preference  over  legacies,  but  is  postponed  to  debts  for  valua- 
ble considerations. 

The  executor  or  administrator  will  not  be  protected  in  pay- 
ing a  debt  or  claim  barred  by  the  statute  of  limitations,  nor  will 
his  promise  revive  such  a  claim. 

To  this  point  the  law  is  supreme ;  after  this  point  the  will  is 
efficacious. 

LECTURE  VII. 

LEGACIES,  AND  A  SUMMARY  OF  THE  PRINCIPLES  OF  ACCOUNTING. 

No  legacy  shall  be  paid  by  an  executor  or  administrator  un- 
til after  the  expiration  of  one  year  from  the  time  of  granting 
letters  testamentary  or  of  administration,  unless  directed  by 
the  will  to  be  sooner  paid.  If  directed  to  be  sooner  paid,  the 
executor  or  administrator  may  require  a  bond,  with  two  suffi- 
cient securities,  on  condition  that  if  the  debts  against  deceased 
duly  appear,  and  there  are  not  other  assets  sufficient  to  pay 
other  legacies,  then  the  legatees  will  refund  the  legacy  so  paid 
or  such  ratable  portion  thereof  with  the  other  legatees,  as  may 
be  necessary  for  the  payment  of  such  debts,  and  the  proportion- 
able parts  of  such  legacies,  if  there  be  any,  and  the  costs  and 
charges  incurred  by  reason  of  the  payment  to  such  legatee; 
and  that  if  the  probate  of  the  will  under  which  such  legacy  is 
paid  be  revoked,  or  the  will  be  declared  void,  such  legatee 
will  refund  the  whole  of  such  legacy,  with  interest,  to  the 
executor  or  administrator  entitled  thereto. 

After  the  expiration  of  one  year  the  executors  or  adminis- 


AND  Testamentary  Trustees.  37 

trators  must  discharge  the  specific  legacies  bequeathed  by  the 
will  and  pay  the  general  legacies  if  there  be  assets.  If  these 
be  not  sufficient,  then  an  abatement  of  the  general  legacies  must 
be  made  in  equal  proportions.  Such  payment  shall  be  enforced 
by  the  surrogate  in  the  same  manner  as  the  return  of  an  in- 
ventory and  by  a  suit  on  the  bond  of  such  executor  or  admin- 
istrator, whenever  directed  by  the  surrogate. 

A  legacy  is  a  gift  of  personalty  by  will.    It  may  be : — 

1.  A  general  legacy  (pecuniary),  one  payable  out  of  the 
general  assets  of  the  testator. 

2.  A  specific  legacy,  a  bequest  of  a  specific  part  of  the  per- 
sonalty. 

3.  A  demonstrative  legacy,  partaking  of  the  nature  of  a 
specific  legacy;  when  the  fund  or  portion  of  the  estate 
is  designated  as  the  source  from  which  payment  is  to 
be  made,  so  far  it  is  specific ;  but  in  not  pointing  out  the 
specific  portion  of  the  fund  it  is  general. 

Another  division  of  legacies  is  : — 

1.  Vested,  when  the  right  of  the  property  therein  is  ac- 
quired, notwithstanding  the  deferment  of  the  enjoyment 
of  the  same. 

2.  Contingent,  which  depend  on  the  fulfillment  of  some 
contingency  or  survivorship. 

Another  division  is  into  absolute  and  conditional. 

All  classes  of  legacies  may  lapse  by  failure  of  a  person  to 
take  them,  or  be  adeemed  by  the  destruction  of  the  subject  mat- 
ter in  the  lifetime  of  the  testator. 

If  a  legatee  predecease  the  testator,  the  intended  legacy 
lapses  and  falls  into  the  residue  of  the  estate ;  but  if  the  legatee 
be  a  child  or  other  issue  of  the  testator  and  predecease  the 
testator,  leaving  issue  living  at  the  time  of  the  death  of  the 
testator,  then  such  intended  legacy  shall  not  lapse,  but  shall 
take  effect  as  if  the  death  of  such  intended  legatee  had  hap- 
pened immediately  after  the  death  of  the  testator. 

We  will  now  proceed  to  the  accounting,  gathered  from  the 
law  as  already  given.  The  will  gives  the  executor  or  testa- 
mentary trustee  the  title  to  the  property,  which  must  be  con- 
firmed by  the  court.  Under  this  the  executor  or  trustee  may 
act  to  a  limited  extent  in  preserving  the  property  and  in  dis- 
tributing the  corpus,  prior  to  qualification. 


33  Accounts  of  Executors 

Having  qualified,  it  gives  him  the  ownership  so  far  as  con- 
cerns the  power  of  collecting  the  assets  and  suing  for  them. 

Next  an  inventory  is  made  of  the  personal  property,  with 
estimated  values  of  it  taken  by  appraisers.  Now  begins  ac- 
counting. The  executor,  as  trustee,  holds  the  property  for  the 
benefit  of  creditors  and  those  interested  in  the  accounts,  with 
power  to  repel  interference  from  them. 

Under  the  category  of  duties,  he  debits  himself  with  a 
classified  set  of  assets,  so  as  to  show  the  whole  of  the  estate 
in  accordance  with  the  inventory,  for  which  he  is  answerable. 
The  total  of  the  inventory  is  the  estimated  value  of  the  estate. 
Any  one  of  the  assets  may  be  increased  at  the  expense  of  an- 
other and  his  relation  to  those  creditors  and  those  interested  may 
not  be  altered,  for  the  sum  total  of  the  assets  will  remain  the 
same  and  the  interest  of  no  one  will  be  affected.  There  is  a 
mere  shifting  of  values.  Any  newly  discovered  property  must 
be  inventoried,  and  the  executor  must  debit  himself  with  the 
value  of  the  discovery.  If  on  realization  of  an  asset  by  sale  the 
value  of  the  estate  is  increased,  he  must  debit  himself  with  the 
increase ;  for  this  is  considered  a  profit,  and  all  profits 
from  sales  go  to  the  estate.  If  in  the  realization  the  value  of 
the  estate  is  decreased,  he  must  credit  himself  with  the  decrease. 
Total  of  executor's  indebtedness  =  value  of  original  entry  -\- 
value  of  additional  inventories  +  increase  of  values  of  assets 
over  and  above  inventoried  values. 

An  executor  may  have  been  indebted  to  the  decedent  at  the 
time  of  the  decedent's  death ;  he  cannot  hold  his  indebtedness 
as  an  offset  to  a  legacy,  or  a  legacy  as  an  offset  to  the  indebt- 
edness, for  in  the  event  of  the  amount  distributable  to  the 
legatees  being  insufficient  to  pay  them  in  full,  as  a  debtor  to  the 
estate  he  is  held  in  full,  but  as  a  legatee  he  receives  only  his 
scaled  legacy,  like  other  legatees. 

It  is  a  general  principle  in  trustees'  accounting  that  the  trus- 
tee can  receive  no  benefit  from  an  estate,  except  such  as  is 
given  him  under  a  will  or  as  commission  for  his  services,  and 
that  he  is  supposed  to  do  all  work  connected  with  the  estate, 
for  which  he  will  receive  no  pay,  but  that  the  surrogate  may 
allow  him  for  services  of  others,  if  they  are  necessary,  and 
grant  him  extra  compensation  if  his  services  are  extraordinary. 
This  condition  puts  it  out  of  the  power  of  the  trustee  to  make 


AND  Testamentary  Trustees.  39 

and  legally  enforce  extra  compensation.  The  surrogate,  the 
legal  substitute  of  the  deceased,  is  allowed  to  decide.  The 
will  may  override  all  this. 

The  assets  with  which  the  executor  by  virtue  of  his  office 
has  debited  himself,  must  in  the  nature  of  things  remain  assets ; 
they  cannot  possibly  pass  into  liabilities.  Yet  he  may  enter 
into  another  relation  by  properly  disposing  of  them,  in  which 
case  he  becomes  a  creditor  in  the  language  of  the  law  with 
respect  to  them.  If  he  can  account  for  any  portion  of  them 
passing  lawfully  out  of  his  hands,  he  is  credited  with  that 
portion,  and  this  he  may  have  to  do  at  an  intermediate  ac- 
counting, showing  what  remains,  with  which  he  is  still  debited. 

He  will  be  credited  with  all  administrative  expenses,  with 
all  losses  which  have  arisen  through  no  fault  of  his  own,  with 
all  payments  to  creditors  and  legatees,  so  long  as  the  distribu- 
tion is  according  to  law,  and  with  a  residue  if  there  be.  one, 
making  the  sum  of  his  credits  equal  the  sum  of  his  debits. 

This  equation  is  the  foundation  of  the  system.  The  sum  of 
the  executor's  debits  equals  the  sum  of  his  credits ;  i.  e.,  what- 
ever came  into  his  hands  has  been  legally  passed  out.  The 
bookkeeping  as  laid  down  by  the  law  is  one  of  single  entry; 
not  the  single  entry  of  commercial  bookkeeping,  which  is 
founded  on  proprietorship,  but  of  bookkeeping  founded  on 
trusteeship. 

LECTURE  VIII. 

ORDER  OF  DISTRIBUTION   OF  RESIDUE ADVANCEMENTS, 

COMMISSIONS. 

If  the  deceased  died  intestate,  the  surplus  of  his  personal 
property  after  payment  of  debts,  and  if  he  left  a  will,  such  sur- 
plus, after  the  payment  of  debts  and  legacies,  if  not  bequeathed, 
must  be  distributed  to  his  widow,  children  or  next  of  kin,  in 
the  manner  following: 

1.  One-third  part  to  the  widow,  and  the  residue  in  equal 
portions  among  the  children,  and  such  persons  as  legally  repre- 
sent the  children,  if  any  of  them  have  died  before  the  deceased. 

2.  If  there  be  no  children,  nor  any  legal  representatives 
of  them,  then  one-half  of  the  whole  surplus  shall  be  allotted  to 
the  widow,  and  the  other  half  distributed  to  the  next  of  kin 
of  the  deceased  entitled  thereto. 


40  Accounts  of  Executors 

3.  If  the  deceased  leaves  a  widow,  and  no  descendant,  par- 
ents, brother  or  sister,  nephew  or  niece,  then  the  widow  shall 
be  entitled  to  the  whole  surplus;  but  if  there  be  a  brother  or 
sister,  nephew  or  niece,  and  no  descendant  or  parent,  the 
widow  shall  be  entitled  to  one-half  of  the  surplus,  as  above 
provided,  and  to  the  whole  of  the  residue  if  it  does  not  exceed 
two  thousand  dollars ;  if  the  residue  exceeds  that  sum,  she 
shall  receive,  in  addition  to  the  one-half,  two  thousand  dollars ; 
and  the  remainder  shall  be  distributed  to  the  brothers  and  sis- 
ters and  their  representatives. 

4.  If  there  be  no  widow,  the  whole  surplus  shall  be  dis- 
tributed equally  among  the  children  and  such  as  legally  repre- 
sent them. 

5.  If  there  be  no  widow  and  no  children,  and  no  representa- 
tive of  a  child,  the  whole  surplus  shall  be  distributed  to  the 
next  of  kin,  in  equal  degree  to  the  deceased  and  their  legal 
representatives. 

6.  If  the  deceased  leave  no  children,  and  no  representatives 
of  them,  and  no  father,  and  leave  a  widow  and  a  mother,  the 
half  not  distributed  to  the  widow  shall  be  distributed  in  equal 
shares  to  his  mother  and  brothers  and  sisters,  or  the  representa- 
tives of  such  brothers  and  sisters;  and  if  there  be  no  widow, 
the  whole  surplus  shall  be  distributed  in  like  manner  to  the 
mother  and  to  the  brothers  and  sisters,  or  the  representatives 
of  such  brothers  and  sisters. 

7.  If  the  deceased  leave  a  father  and  no  child  or  descendant, 
the  father  shall  take  one-half,  if  there  be  a  widow,  and  the 
whole,  if  there  be  no  widow. 

8.  If  the  deceased  leave  a  mother,  and  no  child  or  de- 
scendant, father,  brother,  sister,  or  representatives  of  a  brother 
or  sister,  the  mother,  if  there  be  a  widow,  shall  take  one-half ; 
and  the  whole  if  there  be  no  widow. 

9.  If  the  deceased  was  illegitimate  and  leave  a  mother,  and 
no  child,  or  descendant,  or  widow,  such  mother  shall  take  the 
whole,  and  shall  be  entitled  to  letters  of  administration  in  ex- 
clusion of  all  other  persons.  If  the  mother  of  such  deceased 
be  dead,  the  relatives  of  the  deceased  on  the  part  of  the  mother 
shall  take  in  the  same  manner  as  if  the  deceased  had  been 
legitimate,  and  be  entitled  to  letters  of  administration  in  the 
same  order. 


AND  Testamentary  Trustees.  41 

10.  Where  the  descendants  or  next  of  kin  of  the  deceased, 
entitled  to  share  in  his  estate,  are  all  in  equal  degree  to  the 
deceased,  their  shares  shall  be  equal. 

11.  When  such  descendants  or  next  of  kin  are  of  unequal 
degrees  of  kindred,  the  surplus  shall  be  apportioned  among 
those  entitled  thereto  according  to  their  respective  stocks,  so 
that  those  who  take  in  their  own  right  shall  receive  equal 
shares,  and  those  who  take  by  representation  shall  receive  the 
share  to  which  the  parent  whom  they  represent  would  have 
been  entitled  if  living. 

12.  Representation  shall  be  admitted  among  collaterals  in 
the  same  manner  as  allowed  by  law  in  reference  to  real  estate. 

13.  Relatives  of  the  half  blood  shall  take  equally  with 
those  of  the  whole  blood  in  the  same  degree;  and  the  repre- 
sentatives of  such  relatives  shall  take  in  like  manner  as  the 
representatives  of  the  whole  blood. 

14.  Descendants  and  next  of  kin  of  the  deceased,  begotten 
before  his  death  but  born  thereafter,  shall  take  in  the  same 
manner  as  if  they  had  been  born  in  the  lifetime  of  the  deceased 
and  had  survived  him. 

15.  If  a  woman  die  leaving  illegitimate  children,  and  no 
lawful  issue,  such  children  inherit  her  personal  property  as  if 
legitimate. 

On  examining  the  above  rules  for  distribution  of  residue  of 
the  personal  property  of  an  estate,  we  find: 

1.  That  the  widow,  who  is  not  a  relative  by  blood,  has  yet 
in  all  cases  special  allowances  made  to  her. 

2.  That  taking  the  deceased  as  the  central  figure,  and  trac- 
ing the  stock  (stirpes)  downward,  he  may  have  children ;  that 
each  of  them  who  is  alive  will  have  an  equal  share  after  pro- 
viding for  the  widow ;  and  the  children  of  those  who  are  dead 
will  equally  receive  the  share  of  the  parent.  This  is  called  per 
stirpes,  and  not  per  capita. 

3.  That  there  being  no  downward  stock,  we  proceed  up- 
ward to  the  father,  who  will  take  the  whole,  except  what  the 
law  gives  to  the  widow. 

4.  If  the  downward  stock  of  the  deceased  entirely  fail,  and 
the  father  is  likewise  dead,  then  the  children  of  the  father, 
or  brothers  and  sisters  of  the  decedent  who  are  alive,  take 
equal  shares,  and  the  nephews  and  nieces  of  the  decedent  take 


42  Accounts  of  Executors 

the  shares  of  their  parents  who  are  dead,  share  and  share  alike ; 
i.  e.,  per  stirpes ;  but  also  that  the  widow  is  first  provided  for, 
and  that  the  mother  receives  a  share  as  though  she  were  a 
sister. 

EXAMPLES. 

1.  The  residue  of  a  man's  personal  property  is  $21,000; 
there  are  surviving  him  a  widow,  three  children,  and  two 
grandchildren,  whose  parent  is  dead.  What  portion  of  the 
S2i,ooo  will  each  of  the  survivors  receive? 

Answer — Widow  $7,000,  each  of  surviving  children  $3,500, 
and  each  of  the  grandchildren  $1,750. 

2.  Show  the  double  entry  bookkeeping  necessary  to  carry 
out  the  conditions  of  Question  No.  i. 

3.  The  residue  of  a  man's  personal  property  is  $21,000.  He 
died,  leaving  no  children,  grandchildren,  or  father,  but  he 
left  a  widow,  a  mother,  a  brother  and  sister  alive,  and  two  sons 
of  a  sister  who  predeceased  him.  How  is  the  property  to  be  dis- 
tributed ? 

Answer — Widow  $10,500,  mother,  brother  and  sister  each 
$2,625,  3.nd  each  nephew  $1,312.50. 

ADVANCEMENTS. 

If  any  child  of  a  deceased  person  has  been  acivanced  by  the 
deceased,  by  settlement  or  portion  of  real  or  personal  property, 
the  value  thereof  shall  be  reckoned  with  that  part  of  the  sur- 
plus of  the  personal  property  which  remains  to  be  distributed 
among  the  children;  and  if  such  advancement  be  equal  or 
superior  to  the  amount  which  according  to  the  preceding  sec- 
tion would  be  distributed  to  such  child  as  his  share  of  such 
surplus  and  advancement,  such  child  and  his  descendants  shall 
be  excluded  from  any  share  in  the  distribution  of  such  surplus. 
If  such  advancement  be  not  equal  to  such  amount,  such  child 
or  his  descendants  shall  be  entitled  to  receive  so  much  only 
as  is  sufficient  to  make  all  the  shares  of  all  the  children  in  such 
surplus  and  advancement  to  be  equal,  as  near  as  can  be  esti- 
mated. The  maintaining  or  educating,  or  the  giving  of  money 
to  a  child,  without  a  view  to  a  portion  or  settlement  in  life, 
shall  not  be  deemed  an  advancement,  nor  shall  the  foregoing 


AND  Testamentary  Trustees.  43 

provisions  of  this  section  apply  in  any  case  where  there  is  any 
real  property  of  the  intestate  to  descend  to  his  heirs.  Where 
there  is  a  surplus  of  personal  property  to  be  distributed  and 
the  advancement  consisted  of  personal  property,  or  where  a 
deficiency  in  the  adjustment  of  an  advancement  of  real  prop- 
erty is  chargeable  on  personal  property,  the  decree  for  distribu- 
tion, in  the  surrogate's  court,  must  adjust  all  the  advancements 
which  have  not  been  previously  adjusted  by  the  judgment  of 
a  court  of  competent  jurisdiction.  For  that  purpose,  if  any 
person  to  be  affected  by  the  decree  is  not  a  party  to  the  pro- 
ceeding, the  surrogate  must  cause  him  to  be  brought  in  by  a 
supplementary  decree. 

examples. 

1.  A  person  dies  leaving  a  widow  and  three  children  to 
share  in  the  residue  of  his  personal  property,  valued  at  $21,000. 
He  has  advanced  during  his  lifetime  to  his  eldest  son  $3,000,  to 
establish  him  in  business.  What  are  the  distributed  shares  of 
each?  Widow  $8,000,  the  eldest  $2,333.34,  and  each  of  the 
other  two  $5,333'33- 

2.  Suppose  the  advancement  to  the  eldest  has  been  $9,000, 
what  would  each  then  receive  ?  Widow  $7,000,  eldest  nothing, 
the  other  two  each  $7,000. 

COMMISSIONS. 

Executors,  administrators  and  testamentary  trustees  are  en- 
titled to  commissions  as  given  below,  and  it  is  obligatory  on 
the  surrogate  to  allow  them.  They  should  be  apportioned 
among  the  executors,  among  the  administrators,  and  among 
the  testamentary  trustees  according  to  the  services  rendered 
by  them  respectively,  over  and  above  their  necessary  and  rea- 
sonable expenses,  as  follows : 

For  receiving  and  paying  out  all  sums  of  money  not  exceed- 
ing $1,000,  at  the  rate  of  5%. 

For  receiving  and  paying  out  any  additional  sums  not 
amounting  to  more  than  $10,000,  at  the  rate  of  2^'2%. 

For  all  sums  above  $10,000,  at  the  rate  of  1%. 

If  the  value  of  the  personal  property  amounts  to  $100,000 
or  more  over  all  debts,  each  executor  or  administrator  is  en- 


44  Accounts  of  Executors 

titled  to  the  full  compensation  on  principal  and  income  allowed 
herein  to  a  sole  executor,  administrator  or  testamentary  trus- 
tee, unless  there  are  more  than  three,  in  which  case  the  com- 
pensation to  which  three  would  be  entitled  must  be  appor- 
tioned among  them  according  to  the  services  rendered  by  them 
respectively,  and  a  like  apportionment  shall  be  made  in  all 
cases  where  there  shall  be  more  than  one  executor,  administra- 
tor or  testamentary  trustee.  Where  the  will  provides  a  specific 
compensation  to  an  executor  or  administrator,  he  is  not  entitled 
to  any  allowance  for  his  services,  unless  by  a  written  instru- 
ment filed  with  the  surrogate  he  renounces  the  specific  com- 
pensation. If  a  person  serves  under  different  capacities  he  is 
entitled  to  compensation  in  one  capacity  only,  at  his  election. 

Trustees  are  not  required  to  surrender  the  fund  on  which 
commissions  are  chargeable,  until  the  latter  are  paid. 

Commissions  must  be  applied  in  liquidation  of  a  debt  of  a 
trustee  to  the  estate,  and  in  liquidation  of  claims  against  the 
trustee  for  losses  resulting  from  negligence. 

Trustees  are  entitled  to  commissions  for  receiving  and  pay- 
ing out  all  moneys  constituting  the  corpus  of  the  estate,  and 
any  additions  thereto  from  increase  of  any  kind.  Commissions 
can  never  be  computed  on  sums  exceeding  the  gross  amount 
of  the  estate  and  its  actual  income;  and  the  moneys  paid  out 
upon  which  commissions  may  be  computed  are  the  moneys  paid 
out  for  debts  and  expenses  of  administration  a!nd  to  legatees 
or  other  beneficiaries  which  appear  to  diminish  the  estate  as 
it  exists  in  the  hands  of  the  trustees  and  to  pass  out  of  and 
away  from  the  estate. 

In  any  given  trust,  the  commissions  are  computed  on  the 
amount  received  or  paid  out  by  all  the  trustees,  and  not  on 
the  sums  received  and  paid  out  by  each.  Commissions  are  to 
be  computed  as  of  date  of  settling,  not  of  date  of  filing  the 
account,  and  according  to  the  law  then  in  force. 

Commissions  are  allowed  on  annual  income  when  the  trustee 
is  required  to  keep  funds  invested,  to  receive  and  pay  out  the 
income  annually,  if  he  does  receive  it,  to  render  an  account 
thereof  to  the  beneficiary,  and  to  pay  over  the  net  balance; 
similarly  when  he  renders  annual  accounts  to  the  court  or 
when  he  is  required  or  permitted  to  state  his  accounts  with 
annual  rests.    In  all  these  cases  the  commission  is  computed  at 


AND  Testamentary  Trustees.  45 

the  full  rate.  Computations  cannot  be  allowed  more  frequently 
than  annually.  It  is  against  the  trustee's  interest  to  allow  the 
income  to  accumulate  beyond  a  year,  as  in  that  case  his  com- 
missions might  be  lessened. 

No  commission  is  allowed  on  specific  legacies.  An  annuity, 
which  is  a  series  of  legacies,  like  a  legacy  is  not  chargeable 
with  commissions,  but  where  a  beneficiary  receives  the  use  of 
a  fund,  the  beneficiary  is  to  be  charged  with  commission.  In 
all  these  cases,  commissions  on  income  are  computed  on  each 
occasion  at  the  full  rate;  viz.,  on  the  first  thousand  dollars, 
2>^%  for  receipts  and  2^%  for  payments,  etc.  The  total 
amount  of  income  for  the  year  must  be  taken  as  the  basis. 

EXAMPLES. 

1.  Two  trustees  collect  income  for  one  year  for  the  use  of  a 
beneficiary,  amounting  to  $20,000;  the  expense  attending  the 
same  amounts  to  $2,000.  With  what  sum  shall  the  beneficiary 
be  charged  for  commission,  and  how  much  for  equal  services 
should  each  trustee  receive  on  the  annual  accounting,  also  how 
much  will  be  due  the  beneficiary? 

Total  commission  $390,  each  trustee's  commission  $195,  and 
amount  due  beneficiary  $18,610. 

2.  Four  trustees  receive  and  pay  out  of  the  corpus  of  an 
estate  $200,000;  the  debts  amount  to  $50,000.  Supposing 
that  their  services  are  equal,  what  should  each  trustee  receive 
for  commission?    Answer — $1,567.50. 

3.  Executor  A  receives  of  corpus  of  an  estate  $20,000,  and 
Executor  B  receives  $30,000;  they  pay  out  together  $40,000. 
What  will  be  the  amount  going  to  the  residuary  legatees  ?  What 
will  be  the  commission  of  each  executor,  their  services  being 
reckoned  in  proportion  to  the  amount  each  executor  received? 
A's  commission  $276,  B's  $414.  Residuary  legatees  would  re- 
ceive $9,310. 

LECTURE  IX. 

investments  and  realization  of  property. 

The  trustee  should  at  all  times  keep  the  trust  fund  fully  in- 
invested,  and  if  he  neglects  to  invest  within  a  reasonable  time 


46  Accounts  of  Executors 

he  may  personally  be  charged  with  interest  for  the  unreasona- 
ble time.  He  is  accountable  for  all  interest  actually  received 
arising  out  of  the  trust  fund,  and  for  all  which  he  might  have 
obtained  by  due  diligence  and  exercise  of  ordinary  ability. 

The  property  being  once  well  invested,  the  investments 
should  not  be  changed  without  good  reason;  e.  g.,  if  the  in- 
vestment has  become  insecure  the  estate  might  suffer  loss ;  or 
if  it  has  become  unproductive,  the  beneficiary  may  be  suffering 
in  income.  The  trustee  should  not  traffic  in  trust  securities,  as 
he  thereby  endangers  the  fund,  yet  if  a  security  has  acquired 
a  speculative  value  much  above  its  par  as  an  investment,  the 
investment  should  be  changed  so  that  the  life  beneficiary  may 
receive  the  increase  of  income  to  which  he  is  entitled.  The  two 
objects  which  the  trustee  should  have  in  view  are:  first,  se- 
curity, to  protect  the  interest  of  the  remainderman;  and  pro- 
ductiveness, so  that  the  life  beneficiary  may  receive  the  cur- 
rent rate  of  interest. 

A  testator  sometimes  provides  that  his  business  shall  be 
carried  on  after  his  death  for  a  certain  time.  In  such  a  case  it 
is  the  trustee's  duty  so  to  do,  but  if  the  matter  is  permissive,  he 
should  not  continue  it  against  his  own  judgment. 

A  partnership  cannot  be  continued  after  a  change  in  the 
firm,  nor  should  the  capital  be  increased.  A  trustee  should 
never  be  tempted  to  hazard  the  safety  of  the  fund  so  as  to 
make  unusually  large  returns. 

The  following  may  be  pointed  out  as  unfit  investments: 
Loans  on  merely  personal  security,  investments  on  unincor- 
porated business  ventures,  partnerships,  patents,  second  mort- 
gages, and  mortgages  on  leasehold  property,  unproductive 
real  estate  and  all  investments  of  an  untried  or  speculative  na- 
ture. 

INVESTMENT  OF  TRUST  FUNDS   IN   STATE  OF   NEW   YORK. 

Section  9,  Chapter  295.  Laws  of  1902.  "An  executor,  ad- 
ministrator, guardian,  trustee  or  other  person  holding  trust 
funds  for  investment  may  invest  the  same  in  the  same  kind  of 
securities  as  those  in  which  savings  banks  of  this  state  are  by 
law  authorized  to  invest  the  money  deposited  therein  and  the 
income  derived  therefrom;  and  in  bonds  and  mortgages  on 


AND  Testamentary  Trustees.  47 

unincumbered  real  property  in  this  state  worth  fifty  per  cent, 
more  than  the  amount  loaned  thereon." 

Sec.  116.  Banking  Law  of  1902.  ''In  the  stocks  or  bonds 
01  interest  bearing  obligations  of  the  United  States,  or  those 
for  which  the  United  States  are  pledged  to  provide  for  the 
payment  of  the  interest  and  principal,  including  the  bonds  of 
the  District  of  Columbia. 

"In  the  stocks  or  bonds  or  interest  bearing  obligations  of 
this  state,  issued  pursuant  to  the  authority  of  any  law  of  the 
state." 

"In  the  stocks  or  bonds  or  interest  bearing  obligations  of 
any  state  of  the  United  States  which  has  not  within  ten  years 
previous  to  making  such  investment  by  such  corporation  de- 
faulted in  the  payment  of  any  part  of  either  principal  or  inter- 
est of  any  debt  authorized  by  the  legislature  of  any  such  state 
to  be  contracted ;  and  in  the  bonds  or  interest  bearing  obliga- 
tions of  any  state  of  the  United  States,  issued  in  pursuance  of 
the  authority  of  the  legislature  of  such  state,  which  have  prior 
to  the  passage  of  this  act  been  issued  for  the  funding  or  settle- 
ment of  any  previous  obligation  of  such  state  theretobefore  in 
default  and  on  which  said  funding  or  settlement  obligation  there 
has  been  no  default  in  the  payment  of  either  principal  or  inter- 
est, since  the  issuance  of  such  funded  or  settlement  obligation, 
and  provided  the  interest  on  such  funded  or  settlement  obliga- 
tion has  been  paid  regularly  for  a  period  not  less  than  ten  years 
next  preceding  such  investments. 

"In  the  stocks  or  bonds  of  any  city,  county,  town  or  village, 
school  district  bonds,  and  union  free  school  district  bonds 
issued  for  school  purposes,  or  in  the  interest-bearing  obliga- 
tions of  any  city  or  county  of  this  state,  issued  pursuant  to 
the  authority  of  any  law  of  the  state  for  the  payment  of  which 
the  faith  and  credit  of  the  municipality  issuing  them  are 
pledged. 

"In  the  stocks  and  bonds  of  the  following  cities:  Boston, 
Worcester,  Cambridge,  Lowell,  Fall  River,  Springfield,  and 
Holyoke,  in  the  State  of  Massachusetts ;  St.  Louis,  in  the  State 
of  Missouri ;  Cleveland,  Cincinnati  and  Toledo,  in  the  State 
of  Ohio ;  Detroit  and  Grand  Rapids,  in  the  State  of  Michigan ; 
Providence,  in  the  State  of  Rhode  Island;  New  Haven  and 
Hartford,  in  the  State  of  Connecticut ;  Portland,  in  the  State  of 


48  Accounts  of  Executors 

Maine;  Philadelphia,  Pittsburg,  Allegheny,  Reading  and 
Scranton,  in  the  State  of  Pennsylvania;  Minneapolis  and  St. 
Paul,  in  the  State  of  Minnesota;  Des  Moines,  in  the  State  of 
Iowa ;  Milwaukee,  in  the  State  of  Wisconsin ;  Louisville,  in  the 
State  of  Kentucky;  Paterson,  Trenton,  Newark  and  Camden, 
in  the  State  of  New  Jersey;  Baltimore,  in  the  State  of  Mary- 
land; Los  Angeles,  in  the  State  of  California.  If  at  any  time 
the  indebtedness  of  any  of  said  cities,  less  its  w^ater  debt  and 
sinking  fund,  shall  receive  seven  per  centum  of  its  valuation 
for  the  purposes  of  taxation,  its  bonds  and  stocks  shall  there- 
after, and  until  such  indebtedness  shall  be  reduced  to  seven  per 
centum  of  the  valuation  for  the  purposes  of  taxation,  cease  to 
be  an  authorized  investment  for  the  money  of  savings  banks." 
Also  in  the  securities  of  certain  railroads,  for  which  see 
Banking  Law  as  amended  by  the  legislature,  1902. 

REALIZATION   OF   PROPERTY. 

Certain  property  may  not  come  into  the  hands  of  the  trus- 
tee immediately  on  the  assumption  of  the  trust,  so  that  the  life 
beneficiary  will  be  deprived  of  any  benefit  from  it.  When  this 
fund  is  realized  it  must  be  so  apportioned  that  the  life  benefi- 
ciary will  receive  income  from  it  at  the  usual  rate  of  interest 
from  the  beginning  of  the  trust  and  the  balance  of  the  fund 
will  go  to  the  corpus.  The  interest  on  the  portion  going  to 
the  corpus,  from  the  beginning  of  the  trust  to  the  realization, 
at  the  usual  rate  added  to  the  corpus  will  give  the  amount 
realized.  The  interest  should  be  compounded  from  year  to 
year. 

EXAMPLE. 

A  sum  of  money,  the  payment  of  which  is  deferred  two 
years  after  the  beginning  of  the  trust,  is  then  received,  amount- 
ing to  $10,000  with  interest  at  the  rate  of  6%  per  annum.  How 
will  the  fund  be  apportioned  between  corpus  and  income?  So- 
lution: One  dollar  at  compound  interest  in  two  years  will 
amount  to  $1.1236  and  $10,000  divided  by  $1.1236  gives  $8,- 
899.96  for  the  corpus  and  $1,100.04  for  income. 

If  the  sum  of  money  was  entered  in  the  inventory  at  $8,- 
899.96,  then  on  receipt  of  the  amount  cash  would  be  debited 


AND  Testamentary  Trustees.  49 

$10,000,  and  the  inventory  value  would  be  credited  $8,899.96 
and  the  income  credited  $1,100.04.  If  the  inventoried  value 
should  be  $9,000,  then  there  would  be  a  loss  of  $100.04 
with  which  personal  estate  account  is  debited  and  the  realized 
account  credited. 

Illustrations.  A  legacy  receivable  not  immediately  received. 
A  sum  not  received  in  full.  An  unsuitable  investment  sold  and 
converted  into  a  suitable  one. 

Unproductive  property.  Converted  by  sale  into  productive. 
Property  converted  because  the  earnings  are  greatly  in  excess 
of  usual  interest  as  in  case  of  business  or  partnership  or  on 
wasting  investments. 

CORPUS  AND  INCOME  DISTINGUISHED. 

The  instrument  creating  the  trust  decides  conclusively  what 
shall  go  to  the  life  tenant  and  what  to  the  remainderman.  It 
is  simply  a  question  as  to  the  intention  of  the  creator  of  the 
trust.  If  the  trust  instrument  is  silent  as  to  the  apportioning 
of  corpus  and  income,  the  general  rules  prevail. 

1.  If  a  mortgage  held  in  trust  is  foreclosed  and  the  land  is 
bought  in  by  one  of  the  trustees,  and  later  sold  at  an  advance, 
the  proceeds,  over  and  above  interest  on  the  debt,  go  to  capital 
(5  Dem.  73). 

2.  If  trust  property  is  destroyed  by  fire,  the  insurance 
money  belongs  to  the  corpus  (4  Dem.  404),  unless  the  benefi- 
ciary has  paid  the  insurance  premium. 

3.  A  bond  which  forms  part  of  the  property  settled  on  the 
trustee  should  be  inventoried  at  par,  and  if  sold  the  profit  on 
the  sale  goes  to  the  corpus,  but  the  beneficiary  receives  the 
whole  of  the  coupon  interest,  and  as  interest  is  reckoned  from 
day  to  day,  pro  rata  of  the  interest  uncollected  to  the  date  of  sale 
(103  N.  Y.  445). 

If,  however,  the  bonds  are  purchased  at  a  premium  by  the 
trustee,  then  the  nominal  interest  is  apportioned  between  in- 
terest and  principal,  the  former  going  to  the  income  and  the 
latter  forming  a  sinking  fund  to  meet  the  premium  of  the  bond 
when  the  bond  matures.  In  this  latter  case  the  rate  per  cent, 
the  bond  is  yielding  is  found  from  a  bond  table,  such  as  Price's, 
etc. 


5©  Accounts  of  Executors 

EXAMPLE. 

A  bond  per  $ioo,  nominal  rate  4%,  has  2  years  to  run,  is 
bought  for  $101.93,  yielding  the  trustee  3%  interest,  payable 
semi-annually.     Show  the  steps  in  the  account  keeping. 

Debit  the  bond  account  and  credit  the  cash  account  at 
purchase  $101.93.  Half  yearly  interest  at  3%  on  $101.93 
is  $1.53,  which  taken  from  coupon  $2  gives  $.47  for  sink- 
ing fund. 

Now  debit  cash  $2  for  coupon  received  and  credit  in- 
come $1.53  for  interest,  and  credit  the  bond  account  with 
$.47,  the  amount  required  to  sink  premium,  leaving  the 
value  of  the  bond  $101.93 — $.47=$ioi.46.    Next  the  half 
yearly  interest  at  3%   per  annum  on  $101.46  is  $1.52, 
which  taken  from  the  coupon  $2  gives  $.48  for  the  sinking 
fund.     Debit  cash  $2  for  coupon  received  and  credit  in- 
come $1.52  for  interest,  and  the  bond  account  $.48  for  the 
sinking  fund. 
Proceed  in  this  way  to  the  end  of  the  2  years,  and  the  re- 
sult will  be  exactly  $100.    Now  debit  cash  $100  for  the  redemp- 
tion of  the  bond  and  credit  the  bond  account  with  the  same. 
It  will  be  noticed  that  the  premium  has  been  returned  into 
the  cash  ready  for  reinvestment,  as  also  the  interest  ready  for 
distribution  to  the  beneficiaries. 

4.  Dividends.  The  general  rule  is  that  dividends  belong 
to  him  who  holds  the  stock  when  the  dividend  is  declared  and 
allotted,  irrespective  of  when  the  earnings  accrued  or  when 
the  dividend  is  payable.  Consequently  a  dividend  earned  be- 
fore a  testator's  death,  but  declared  and  paid  after,  goes  to 
income.  This  rule  applies  as  between  a  life  beneficiary  and 
a  remainderman,  but  interest  accruing  de  die  in  diem  is  ap- 
portionable,  e.  g.,  in  the  case  of  interest  on  a  mortagage.  The 
courts  have  held  that  the  same  rule  applies,  whether  the  divi- 
dend is  paid  in  cash,  scrip  or  stock. 

If  there  is  a  mere  pro  rata  distribution  of  treasury  stock  to 
the  stockholders,  not  representing  profits,  it  belongs  to  the 
corpus  and  not  to  the  income.  Its  issue  decreases  to  that  ex- 
tent the  value  of  the  original  shares,  giving  to  the  stockholders 
a  larger  number  of  shares,  but  no  larger  fund,  and  the  total 
issue  represents  capital  only. 


AND  Testamentary  Trustees.  51 

Privileges  or  option  given  to  stockholders  to  subscribe  for 
stock  and  bonds,  which  option  has  a  value  of  its  own,  is  held 
by  the  trustees  as  capital,  not  income. 

If  a  corporation  is  consolidated  with  another,  and  for  the 
purpose  of  equalizing  the  interest  of  shareholders  of  the  stock 
in  question,  there  is  during  the  life  tenancy  an  extra  issue 
to  them  of  stock  or  of  bonds  of  the  consolidated  company,  this 
surplus  issue  merely  follows  the  interest  which  it  is  issued  to 
equalize. 

In  allotting  stock  dividends  to  life  tenants,  only  such  portion 
should  be  distributed  as  represents  earnings ;  e.  g.,  if  stock  has 
been  bought  at  a  premium,  and  an  extraordinary  dividend  has 
been  declared,  it  must  be  ascertained  whether  the  selling  price 
of  the  stock  remains  as  high  as  that  at  which  it  was  bought,  and 
if  it  has  fallen  the  difference  must  be  taken  from  the  extra- 
ordinary dividend,  and  accounted  as  corpus,  and  the  balance  of 
the  dividend  will  be  income. 

Contracts  of  trust.  Contracts  entered  into  by  decedent  prior 
to  his  death  must  be  carried  out  by  trustees,  and  any  profits  re- 
sulting therefrom  will  belong  to  the  corpus  and  not  to  income. 

Receiving  payment  on  account.  It  is  held  in  the  matter  of 
Tietgen  (5  Dem.  350)  that  payments  paid  on  account  of  a  debt, 
though  not  exceeding  the  accrued  interest,  must  be  considered 
as  capital,  not  income.  Should  the  entire  debt  be  paid,  with  in- 
terest, the  interest  would  constitute  income. 


LECTURE  X. 
general  remarks  on  offsets  to  income  and  to  corpus; 

ALSO   ON   apportionment   AND   ADJUSTMENTS   OF   EX- 
PENDITURES  BETWEEN    CORPUS   AND    INCOME. 

1.  The  intent  of  the  trust  instrument  must  be  followed  in 
making  deductions  from  (i.  e.,  charges  against)  income. 

2.  The  creator  of  the  trust  may  order  corpus  as  well  as  in- 
come to  be  paid  to  the  beneficiary. 

3.  He  may  direct  income  to  be  paid  subject  to  charges 
which  ordinarily  belong  to  corpus. 

4.  The  income  may  be  granted  subject  to  an  annuity  of  a 
certain  amount. 


52  Accounts  of  Executors 

5.  He  may  order  the  gross  income  to  be  paid  to  the  benefi- 
ciary. 

But  where  not  in  opposition  to  the  trust,  the  following  are 
the  principal  rules  in  relation  to  the  above  offsets,  apportion^ 
ment  and  adjustments: 

1.  Taxes  and  assessments  which  have  become  a  debt  of  the 
testator  prior  to  his  decease  are  payable  by  the  executor  out  of 
corpus. 

2.  Expenses  incurred  in  the  borrowing  of  money  to  invest 
in  government  bonds,  so  as  to  avoid  the  tax  otherwise  payable 
out  of  income,  are  chargeable  against  income. 

3.  Trustees'  commissions  on  rent  and  income  come  out 
of  income. 

4.  Trustees'  commissions  for  receiving  and  paying  out  cor- 
pus come  out  of  corpus. 

5.  Fees  for  legal  expenses  in  litigation  resulting  in  a  trus- 
tee's appointment  in  place  of  a  predecessor  removed  come  out 
of  corpus. 

6.  Ordinary  repairs  must  be  charged  against  income,  other- 
wise the  corpus  will  be  depleted  for  the  benefit  of  income. 

7.  Interest  on  incumbrances,  e.  g.,  on  mortgages,  must  be 
borne  by  the  beneficiary,  i.  e.,  taken  out  of  income. 

8.  The  sundry  expenses  in  conducting  a  business,  such  as 
wages,  rent,  loss  from  bad  debts,  and  depreciation  of  plant, 
come  out  of  income. 

In  apportionment  and  adjustment  the  following  cases  re- 
quire to  he  considered: 

1.  Expenditures  required  to  be  made  on  property  received 
by  trustee  in  an  unfructiferous  condition,  in  order  to  preserve 
it  from  decay,  constitute  a  mere  shifting  of  the  fund. 

2.  Where  the  trustee  under  the  trust  is  authorized  to  invest 
and  reinvest  in  real  estate,  he  may  make  improvements  on  the 
theory  that  such  expenditure  constitutes  an  investment.  This 
also  is  a  mere  shifting  of  the  fund. 

3.  Where  the  expenditure  is  essential  to  preserve  the  estates 
from  destruction,  and  results  in  a  benefit  both  to  the  beneficiary 
and  the  remainderman. 

4.  Where  the  expenditure  is  required  to  make  the  estates 


AND  Testamentary  Trustees.  53 

produce  revenue,  or  a  substantial  revenue,  and  also  to  en- 
hance the  value  of  property,  there  is  a  mere  shifting  of  the 
fund. 

5.  Where  there  are  wasting  values,  it  is  necessary  to  charge 
the  income  with  a  sinking  fund  in  order  to  preserve  the  corpus. 

6.  Compulsory  outlays,  such  as  municipal  assessments  for 
flagging  sidewalks,  widening  streets,  repairs  or  reconstruction 
ordered  by  building  department,  must  be  so  charged  as  to  affect 
equitably  the  beneficiary  and  the  remainderman,  and  this  may 
or  may  not  be  by  apportionment  of  the  outlay,  according  to 
the  requirements  of  the  case. 

EXAMPLES. 

1.  Peck  vs.  Sherwood,  56  N.  Y.,  615.  Here  the  life  interest 
in  land  is  vested  in  one  person,  and  the  remainder  vested  in 
another,  and  there  is  no  fund  in  which  the  two  have  an  interest 
in  common,  but  there  is  an  available  fund  in  the  hands  of  the 
trustee  in  which  the  life  tenant  has  no  interest.  The  trustee  of 
the  remainderman  was  authorized  by  the  court  to  unite  with 
the  life  tenant  in  an  outlay  to  protect  the  property  in  which  the 
remainderman  and  the  life  tenant  have  interests  in  common. 
The  capital  was  charged  one  portion  exclusively  out  of  the 
available  fund,  in  which  the  life  tenant  had  no  interest;  leav- 
ing the  other  portion  exclusively  as  a  liability  against  the  life 
tenant.  The  interest  of  the  life  tenant  in  the  real  estate  is 
found  by  Northampton  tables,  and  this  taken  from  the  total 
value  of  the  real  estate  affected  gives  the  interest  of  the  re- 
mainderman. 

The  apportionment  of  the  outlay  must  be  in  proportion  to 
these  respective  interests,  hence  as  the  total  value  of  the 
real  estate  is  to  life  tenant's  interest,  so  is  the  total  outlay  to 
life  tenant's  share  of  outlay. 

2.  Stevens  vs.  Melcher,  80  Hun.  514  (522-525)  is  a  more 
common  case.  Here  the  trustee  held  in  trust  both  real  and 
personal  property,  in  which  the  remainderman  and  the  life 
tenant  had  interests  in  common.  For  an  outlay  on  the  real 
estate,  the  adjustment  of  interests  was  made  by  charging  the 
whole  of  the  outlay  against  capital,  i.  e.,  the  whole  was  taken 
out  of  capital  (corpus),  thus  bringing  about  an  automatic  ad- 


54  Accounts  of  Executors 

justment   by  the  remainderman  losing  the  amount  of  the  out- 
lay and  the  life  tenant  the  income  from  the  portion  lost. 

The  same  applies  in  Whittemore  vs.  Beekman,  2  Dem.  275 
(283),  where  a  loss  is  sustained  in  an  authorized  investment; 
also  in  another  branch  of  the  Stevens  vs.  Melcher  case  (80 
Hun.,  525  seq.),  where  the  outlay  has  effected  a  cor- 
responding increase  in  the  value  of  the  improved  real  estate; 
a  charge  of  the  outlay  to  the  extent  of  the  entire  permanent 
increase  may  be  taken  out  of  capital,  as  by  this  means  there  is 
a  mere  shifting  of  investment  from  personalty  to  realty,  while 
any  balance  over  and  above  permanent  increase  may  be  charged 
directly  to  income. 

3.  In  Cogswell  vs.  Cogswell,  2  Edw.  Ch.  231  (240-242), 
certain  buildings  in  Cedar  Street  are  left  in  trust  with  re- 
mainder. The  city  in  widening  the  street  cut  off  ten  feet  in 
front.  The  court  directed  that  the  cost  of  erecting  warehouses 
on  the  lots  be  paid  from  the  available  capital ;  that  out  of  the 
rents  6%  of  the  cost  of  the  buildings  be  reserved,  together  with 
a  reasonable  allowance  for  depreciation  of  the  buildings  until 
the  life  estates  fall.  In  this  case  the  life  tenants  receive  the 
net  receipts  and  profits  of  this  portion  of  the  estate,  and  in  the 
meantime  the  money  expended  is  a  good  and  safe  investment, 
drawing  6%  during  the  life  estate. 

In  the  case  of  only  one  life  tenant  the  expectation-of-life 
table  will  give  the  average  of  life  for  the  life  tenarit.  Then  the 
difference  between  the  estimated  value  of  the  buildings  at  the 
end  of  the  average  life  and  the  present  value  will  give  the  total 
depreciation,  which,  divided  by  the  average  life,  will  give  the 
depreciation  to  be  written  off  yearly  from  the  income  as  a  sink- 
ing fund  to  the  cost. 

4.  In  Swain  vs.  Ferine,  5  Johns  Ch.  482  (491  seq.),  a 
wddow  filed  a  bill  for  assignment  of  dower  and  mesne  profits ; 
the  heirs  had  been  obliged  to  pay  off  a  mortgage  to  which 
the  dower  interest  was  subject.  The  decree  gave  the  widow 
one-third  and  mesne  profits,  less  her  ratable  contribution 
toward  the  redemption  of  the  mortgage.  The  court  held  that 
in  view  of  her  getting  her  third  from  the  mortgage  she  ought 
to  pay  interest  on  one-third  of  the  mortgage  debt  paid  by  the 
heirs,  but  as  this  method  would  be  inconvenient  and  embarrass- 
ing, the  direction  was  that  the  value  of  such  annual  payment 


AND  Testamentary  Trustees.  55 

for  her  life  should  be  computed  and  subtracted  from  the  mesne 
profits*,  any  excess  to  be  subtracted  from  the  dower  assigned. 

5.  Stillwell  vs.  Doughty,  2  Bradf.  311.  Where  there  was 
no  trust  a  sewer  assessment  was  wholly  charged  on  the  re- 
mainderman, and  the  life  tenant  was  directed  to  pay  interest 
on  the  assessment. 

When  property  does  not  immediately  pass  into  the  hands  of 
the  trustee  at  the  beginning  of  the  trust,  such  a  sum  of  money, 
called  the  present  worth,  must  be  found  as  at  the  current 
rate  of  interest  for  the  time  between  the  beginning  of  the  trust 
and  the  time  it  passes  into  the  trustee's  hands  will  amount  to 
the  value  passing  into  his  hands.  This  present  worth  is  cor- 
pus, and  the  difference  between  it  and  the  amount  passing  into 
his  hands  is  income. 

•  EXAMPLES. 

1.  The  amount  of  legacy  not  immediately  received. 

2.  Where  the  property,  being  an  unsuitable  investment,  is 
sold  for  conversion  some  time  after  the  beginning  of  the  trust. 

3.  Where  the  property  is  converted  because  of  its  unpro- 
ductiveness ;  such  as  vacant  lots. 

4.  Where  principal  and  interest  payable  during  trust  are 
contained  in  one  sum. 

5.  On  an  obligation  in  which  the  whole  cannot  be  collected 
in  the  realization. 

6.  Gain  or  loss  in  temporarily  conducting  a  business  until 
it  is  converted. 

Wasting  property,  which  may  be  of  several  kinds: 
I.     Where  the  waste  is  indeterminate,  until  it  is  suddenly 
discovered  as  in  the  case  of  a  mining  property,  or  in  a  mining 
stock. 

The  best  way  to  treat  this  is  to  give  the  life  tenant  a  cur- 
rent rate  of  interest  on  the  inventory  value,  out  of  the  gross 
income  received,  and  to  carry  the  balance  to  reduce  the  inven- 
tory. The  current  rate  is  to  be  continued  on  the  diminishing 
value  so  long  as  there  remains  any  balance.    If  after  the  capi- 


*  The  mesne  profits  are  the  profits  of  land  while  in  the  possession  of 
a  person  not  the  owner. 


56  Accounts  of  Executors 

tal  has  been  wiped  out  income  should  be  received,  it  will  form 
corpus  going  to  the  remainderman.  Of  course,  this  new  corpus 
should  be  reinvested  so  as  to  yield  further  income. 

Where  the  gross  income  is  certain  and  the  waste  is  de- 
terminate, but  to  the  extent  of  only  a  part  of  the  property: 
This  is  the  case  with  a  bond  purchased  by  a  trustee  above  par, 
the  waste  part  being  the  premium.  The  rate  per  cent,  the 
bond  is  actually  yielding  is  to  be  determined  from  bond  tables, 
and  from  the  value  of  the  bond  and  rate  per  cent,  it  yields  can 
be  found  the  interest,  which  taken  from  the  coupons  received 
gives  what  is  usually  called  the  sinking  fund.  The  income  ac- 
count is  debited  with  the  sinking  fund  and  the  bond  account 
credited.  The  bond  account  is  thus  reduced  in  value  by  the 
operation,  and  the  process  is  continued,  using  each  time  the 
diminishing  balance,  instead  of  the  inventory  value,  until  the 
premium  is  wiped  out.  The  same  method  is  appHcable  to  an 
annuity  receivable  by  estate,  except  that  the  process  is  con- 
tinued until  the  annuity  is  extinguished. 

3.  In  the  case  of  a  lease  to  the  decedent  during  his  lifetime, 
in  which  there  is  a  yearly  gain  over  rent  to  owner,  repairs,  in- 
surance, etc.,  which  has  a  term  of  years  yet  unexpired,  the 
following  is  the  modus  operandi  for  keeping  the  accounts : 

We  presume  that  there  is  an  account  among  the  assets,  repre- 
senting the  inventory  value  of  the  lease,  which  we  will  call 
lease  account.  On  receiving  and  disbursing  for  account  of  this 
lease  open  another  account  called  realization  of  lease  account. 
Debit  cash  yearly  with  all  income  and  credit  the  realization 
account  with  the  same.  Also  debit  realization  account  yearly 
with  all  disbursements  and  credit  cash  with  the  same.  Two 
cases  may  present  themselves : 

(a)  The  credits  may  exceed  the  debits,  and  the  difference 
will  give  the  net  realization,  which  is  made  up  of  both  corpus 
and  income  received  for  the  year,  and  which  require  to  be 
separated. 

(b)  The  debits  may  exceed  the  credits,  and  the  difference 
contains  neither  corpus  nor  income,  but  simply  a  diminution  of 
corpus  for  the  year. 

If  the  second  case  obtains,  debit  personal  estate  account  with 
diminution  of  corpus  and  credit  realization  account  with  the 
same. 


AND  Testamentary  Trustees.  57 

To  separate  the  corpus  from  the  income  requires: 

1.  Choosing  a  rate  per  cent,  of  interest  which  should  be 
such  as  can  be  obtained  in  investments  of  a  safe  kind. 

2.  A  table  of  present  values  at  the  given  rate  per  cent,  of 
$1,  payment  of  which  is  deferred,  for  one,  two,  three  years,  etc. 

If  there  be  a  net  realization  at  the  end  of  the  first  year,  then 
multiply  the  net  realization  at  end  of  first  year  by  the  present 
value  of  $1,  payment  of  which  is  deferred  one  year  at  the  said 
rate  per  cent.  If  there  be  a  net  realization  at  the  end  of,  say, 
the  third  year,  then  multiply  net  realization  by  the  present 
value  of  $1,  payment  of  which  is  deferred  three  years,  etc.,  etc., 
to  obtain  the  corpus  which  is  then  realized.  Having  obtained 
it,  debit  the  realization  account  with  it,  and  credit  the  lease 
account  with  the  same. 

At  the  end  of  any  period  debit  realization  account  with  net 
income  and  credit  income  account  with  same.  Finally  balance 
the  lease  account  into  the  personal  estate  account  for  increase 
or  decrease  of  realization  over  inventory  value,  when  there  is 
an  income. 

From  observing  the  entries  carried  into  the  personal  estate 
account  it  will  be  seen  how  much  the  inventory  value  of  lease 
was  overvalued  or  undervalued. 

Apportionment  of  rents,  annuities  and  dividends.  These 
relate  to  sums  of  money  regularly  payable  or  becoming  due. 

If  an  estate  merely  devolves  on  another  as  from  a  decedent 
to  an  heir,  or  to  a  life  beneficiary,  or  from  an  executor  to  a 
trustee,  the  estate  is  not  determined,  and  there  is  no  appor- 
tionment; but  if  an  estate  is  determined  by  the  death  of  a 
recipient  of  the  rents,  annuities  and  dividends,  then  there  is  an 
apportionment  reckoned  from  the  last  payment  to  the  evening 
of  the  death  of  the  last  recipient.  It,  however,  is  only  recover- 
able when  the  entire  amount  of  which  such  apportionment 
forms  part  becomes  due  and  payable  and  not  before,  from  the 
person  entitled  to  collect  the  whole. 


58 


Accounts  of  Executors 

Edward  Brown's  Estate 


I 

Debtors  to  Estate:— 

I 

Henry  Edmonson 

2 

William  Smith 

3 

Henry  Smithson 

4 

John  May 

1 

Henry  Smith 

I^egacy  left  to  decedent,  but  not  paid  him 

2 

Creditors  of  Estate:— 

I 

William  Hopetown 

2 

Henry  Thompson 
Henry  Arnold 

3 

4 

Judgment  Creditors 

3 

Sundry  expenses: — 

I 

Funeral  expenses 

2 

Probate  expenses 

3 

Transfer  tax  on  IvCgacy  left  decedent 

4 

Accountant's  and  Attorney's  fees 

5 

Commission,  i.  e.,  Legacy  left  in  lieu  of  commission 

4 

Sundry  persons  interested  in  Estate: — 

I 

Elizabeth  Brown,  widow  of  decedent,  life  beneficiary  of  proceeds  of 

mortgage 

2 

John  Brown,  son  of  decedent,  residuary  legatee 

3 

John  Brown,  next  of  kin  of  Elizabeth  Brown 

CLASSIFICATION   OF  ACCOUNTS 

I 

Personal  Estate  account 

2 

Asset  accounts 

3 

Distributive  accounts 

Accounts  and  Transactions  of  Henry  Arlington,  Executor 


1900 
Dec. 

I 
I 

Dec. 

31 
31 

fS. 

I 
2 

2 

June 

30 

July 

I 

Edward  Brown  died  this  day,  having  nominated 

H.  Arlington  Executoi 
Inventory  taken  and  appraised 
Mortgages  receivable 
Furniture 
Cash  in  house 
Debts  due  deceased,  Henry  Edmonson 
Wm.  Smith 
Henry  Smithson 
John  May 
Accrued  interest  on  mortgage  for  5  months  to 
date 

Found  that  decedent  owes  State  Transfer  tax 
on  legacy  left  him,  being  at  5  per  cent,  on 
$1,000 

Collected  6  months'  interest ($8,000  at  5  per  cent.) 
to  date 

Newly  discovered  assets:— 

Henry  Smith's  indebtedness  to  decedent 

Legacy  left  by  Millard  Werner,  deceased 
Received  above  legacy 
Approved  the  following  claims  against  Estate:— 

Funeral  expenses 

Probate  expenses 

William  Hopetown,  amount  of  his  bill 

Henry  Thomson,  amount  of  his  bill 

Henry  Arnold,  amount  of  his  bill 
Paid  the  following : — 

Tax  on  legacy 

Funeral  expenses 

Probate  expenses 

William  Hopetown 

Henry  Thomson 

Henry  Arnold 

Life  beneficiary 
Received  6  months'  interest  on  mortrage  to  date 
Received  amount  of  mortgage  paid  on  this  day 
Henry  Edmonson  paid  his  indebtedness  to  Estate 
William  Smith  paid  his  indebtedness  to  Estate 
Henry  Smithson  paid  on  account 
Furniture  sold  by  auction  this  day 
Depreciation  on  sale  of  furniture 
Deposited  in  Knickerbocker  Trust  Co. 


8,000 
1,000 
800 
1,000 
500 
500 
250 

.  166 


200 
1,000 
1,000 

150 

100 

50 

40 

10 

50 

150 

100 

50 

40 

10 

140 

200 

8,000 

1,000 

500 

200 

800 

200 

10,000 


67 


12,216 


67 


AND  Testamentary  Trustees. 


59 


ist  December,  1900 

Sundries  to  Personal  Bstale  account 

Mortgages  receivable 

Furniture 

Cash  in  house 
Debts  due  decedent : — 

Henry  Edmonson 

William  Smith 

Henry  Smithson 

John  May 

Interest  accrued  on  mortgage  for  5  months  to  date 
As  per  inventory  taken  this  day 


-31st  December,  1900- 


Personal  Estate  account 
To  L,egacy  account 
For  amount  of  transfer  tax  on  legacy  to  deceased 


1st  Februarj',  1901- 


Sundries  to  Personal  Estate  account 
For  newly  discovered  assets 
Henry  Smith,  indebtedness  to  Estate 
I,egacy  from  Estate  of  Millard  Werner 


-2nd  February,  1901- 


Personal  Estate  to  Sundries 
Funeral  expenses 
Probate  expenses 
Wm.  Hopetov/n,  amount  of  his  bill 
Henry  Thomson,  amount  of  his  bill 
Heary  Arnold,  amount  of  his  bill 


■  30th  June,  1901- 


Personal  Estate  account 

To  Furniture  account 

For  depreciation  on  sale  of  furniture 


8,000 

1,000 

800 

1,000 

500 
500 
250 
166 


200 
1,000 


350 


67 


12,216 


50 


1,200 


67 


In  Accordance  with  Decree  of  Surrogate,  it  Will  Be  Necessary  to 
Make  the  Following  Entries  : 


Personal  Estate  account  to  Cash 
To  pay  judgment  creditors 

Personal  Estate  account  to  Cash 

For  commission  500 

For  Accountant's  and  Attorney's  fee  500 

lyife  beneficiary  account  to  Cash 

For  amount  paid  John  Brown  as  next  of  kin 
Personal  Estate  account  to  Sundries 

Cash 

Knickerbocker  Trust  Co. 

H.  Smithson's  account  (Assignment) 

Jno.  May's  account  (Assignment) 

For  assets  turned  over  to  John  Brown  as  residuary 
legatee 

The  above  entries  have  been  posted  to  their  respective 
accounts  as  of  ist  July,  1901,  in  order  to  close  accounts 
of  the  I,edger 


700 


1,000 


60 
11,150 


700 


1,000 


60 


400 

10,000 

500 

250 


6o 


Accounts  of  Executors 


Dr.    Cash  Book  and  Cash  Account  of  Estate  of  Edward  Brown. 


1900 

Dec. 


1901 
June 


July 


Cash  in  house  as  per  inventory 

Interest  accrued  account — Interest  to  ist  inst. 

166.67 
Ivife  beneficiary  account— Interest  from  ist 

inst.  to  date  33.33 


I,egacy  account — Received  legacy  left  E.  Brown 

by  the  late  Millard  Werner 
Ivife  beneficiary  account — Interest  to  31st 

May,    1901,   when    life    beneficiary 

died  166.67 

Personal  Estate  account — Interest  from  31st 

May,  to  date  33.33 

Mortgage  receivable  account — Mortgage  paid  oflF 

this  day 
H.  Edmonson  paid  his  indebtedness 
H.  Smith  paid  his  indebtedness 
Henry  Smith  paid  his  indebtedness 
Furniture  account — Sold  by  auction  this  day 


Balance 


800 


8,000 

1,000 

500 

200 

800 


12,700 


2,160 


I     2,160 


Cash  Book  and  Cash  Account  of  Estate  of  Edward  Brown.    Cr. 


1901 

Feb. 


July 


July 


Legacy  account — Paid  tax  on  legacy 

Funeral  expenses  account— Undertaker's  bill 

Probate  expenses— paid  this  day 

William  Hopetown — paid  this  day 

Henry  Thomson— paid  this  day 

Henry  Arnold— paid  this  day 

lyife  beneficiary— paid  her  on  account 

Knickerbocker  Trust  Co.— deposited  this  date  at 

2  per  cent. 
Balance 


John  Brown,  as  widow's  next  of  kin 

Commission 

Accountant's  and  Attorney's  fees 

John  Brown,  residuary  legatee 

Judgment  creditors 


10,000 
2,160 


60 
500 
500 
400 
700 


12,700 


2,160 


AND  Testamentary  Trustees. 


6i 


Dr. 


LEDGER  OF  ESTATE  OF  EDWARD  BROWN 
(i)     Personal  Estate  Account 


Cr. 


1900 

Dec 


I?eb. 


Jiuie 


July 


July 


Transfer  tax  on  legacy 


Funeral  expenses 
Probate  expenses 
William  Hopetown 
H.  Thomson 
H.  Arnold 
Depreciation  of 
furniture 


Balance 


Distributed  by  decree : 
Judgment  creditors 
Administration  expen- 
ses 
John    Brown,    residu- 
ry  legatee 


50 

L^. 

31 

150 

100 

50 

40 

10 

200 

600 

12,850 

'& 

I 

June 

30 

13,450 

- 

July 

I 

700 

1,000 

11,150 

— 

12,850 

Mortgages  receivable 
Furniture 
Cash  in  house 
Debts  due  deceased 
Henry  Bdmonson 
William  Smith 
Henry  Smithson 
John  May 

Accrued    interest     on 
mortgage 


Henry  Smith  for  debt 
not  included  in  in- 
ventory. 

lyCgacy  left  by  Mr. 
Werner. 

Interest  from  31st  of 
May  to  date 


Balance 


8,000 

1,000 

800 


I.OOO 

500 
500 
250 

166 


12,216 


200 
1,000 


33 


13,450 


12,850 


12,850 


33 


(2)     Mortgages  Receivable 


1900 

Dec. 


Personal  est.  account 


8,000 


1901 
June 


30 


Cash 


8,000 


(3)     Furniture  Account,  of  which  the  Widow  has  the  Use  During 

Her  Life. 


1900 

Dec. 


Personal  est.  account 


1901 
June 


Proceeds  of  sale 
Personal  est.  account 
for  loss  on  sale 


800 
200 


62 


Accounts  of  Executors 


Dr. 


LEDGER  OF  ESTATE  OF  EDWARD  BROWN 
(4)     Debts  Due  Estate  of  Edward  Brown 


Cr. 


1900 
Dec. 

Feb. 

I 

I 
I 

H.  Edmonson 
Wm.  Smith 
Henry  Smithson 
John  May 

Henry  Smith 

H.  Smithson 
Jno.  May 

t,ooo 

500 
500 
250 

200 

1901 
June   30 

July      1 

June  30 

July      I 

I 

H.  Edmonson 
Wm.  Smith 
Carried  down 

Henry  Smith 

Personal  estate 
Personal  estate 

1,000 
500 
500 
250 
200 

2,450 

2,450 

July 

500 
250 

750 

: 

500 
250 

750 

(5)     Interest  Accrued  to  ist  December,  1900 

1900 

Dec. 

I 

Personal  est.  account 

166 

67 

1900 
Dec. 

31 

Cash 

166 

67 

(6)     Knickerbocker  Trust  Co. 

1901 
July 

I 

Cash  deposited  at  2  per 
cent,  per  annum 

10,000 

1 

1 
1901 
July      1 

John  Brown,  R.  L. 

10,000 

(7)     T.ETwACY   Receivable  Account 

1901 

Feb. 

I 
2 

Personal  est.  account 
Paid  transfer  T. 

1,000 

- 

1901 

Feb. 

31 

I 

Personal  est.  account 

» 

Cash 

50 
1,000 

1,050 

2,050 

DISTRIBUTION  ACCOU 

(8)     Life  Beneficiary  Account   (the  wid 

NTS 

ow  died  31st  May, 

1900) 

1901 

Feb. 
July 

I 
I 

Cash  on  account 
Balance 

Jno.  Brown,  next  of  kin 

■s 

- 

1901 
June 

July 

31 
30 

1 

Interest 

Interest  from  31st  Dec. 
1900,  to  31st  May,  1901 

Balance 

33 
166 

33 
67 

200 

200 

July 

60 

60 

— 

AND  Testamentary  Trustees.  63 

LEDGER  OF  ESTATE  OF  EDWARD  BROWN 
Dr.  (9)     Funeral  Expenses  Cr, 


1901 

Feb. 


Cash 


150 


1901 
Feb. 


2  Personal  est.  account 


(10 

) 

Probate  Expenses 

I90I 

Feb. 

i 
2  Cash 

100 

Tel 

2 

Personal  est.  account 

100 

(11)     Debts  Due  by  Estate  (Creditors). 


1901 

Feb. 


Paid  Wm.  Hopetown 
"  Henry  Thomson 
"    H.  Arnold 


1901 
Feb. 


Wm.  Hopetown 
H.  Thomson 
H.  Arnold 


(12)     Trial  Balance  ist  July,  1901,  before  S.  Decree 


Cash  from  C.  B. 
Henry  Smithson 
John  May 
Knickerbocker  T.  Co. 


2,160 

500 

250 

10,000 

12,  910 


Personal  est.  account 
Kst.  Life  Beneficiary 


12,850 
60 


12,910 


64 


Accounts  of  Executors 


Contents  of  Schedules,  Surrogate  Court  of  County  of  New  York 


Amount  of  Inventory 


-Schedule  A- 


Sales:— 

Furniture 

Debts  mentioned  in  Inventory,  which  have  been  col- 
lected:— 
Henry  Edmonson  $i,ooo 

William  Smith  5cx5 

Interest  collected: — 

Total  400 

lycss  included  in  Inventory  166.67 


-Schedule  B- 


Debts  not  collected  or  collectible: — 

Henry  Smithson  500 

John  May  250 

I/Osses  by  accident 
Assets  discovered  after  taking  of  Inventory:— 

Debt  due  Estate  by  Henry  Smith  200 

lyCgacy  left  deceased  1,000 


-Schedule  C- 


Expenses: — 

Untertaker's  bill 
Probate  expenses 
Transfer  Tax  on  legacy 


150 
100 
50 


-Schedule  D- 


Judgment  Creditors: — 
Allowed 
Disputed 

Moneys  paid  to  Creditors: 
William  Hopetown 
Henry  Thomson 
Henry  Arnold 


248 
452 


-Schedule  E- 


AU  moneys  paid  to  widow 
All  moneys  paid  to  next  kin 


140 
000,00 


-Schedule  F- 


Elizabeth  Brown,  widow  of  deceased,  18  St.  James  Place, 
Brooklyn 

John  Brown,  son  of  deceased,  18  St.  James  Place,  Brook- 
lyn 

Schedule  G 


H.  Arlington,  Executor,  legacy  in  lieu  of  commission 

Balance  due  widow 
Interest  on  mortgage  from  death  of  decedent  to  death  of 
widow,  viz.,  fromi  st  Dec.  1900  to  31st  May   200 
icK)3 
Paid  her  on  account 

LOSSES  ON  SALES 

Appraised  value  of  furniture 
Net  return  of  sale 


140 


1,000 
800 


800 


1,500 


750 
000 


300 


•100 


140 


60 


33 


67 


AND  Testamentary  Trustees. 


65 


Accounting  Before  Surrogate 


I/Henry  Arlington,  Executor,chargemyself  as  follows:— 
With  amount  of  inventory 
With  increase  as  shown  in  Schedules  A  and  B 
Interest  received 
Newly  discovered  assets 


I  credit  myself  as  follows:— 

With  loss  on  sales  as  per  Schedule  G 
With  debts  not  collected,  Schedule  B 
With  expenses  as  per  Schedule  C 
With  moneys  paid  to  creditors,  Schedule  D 
With  all  moneys  paid  to  widow  and  next  of  kin, 
Schedule  E 


Debts  not  collected.  Schedule  B 
Total  amount  to  be  distributed 


Decree  of  Surrogate 

Amounts  coming  to  residuary  legatee,  John  Brown: 
Debts  not  collected 
Cash 
Knickerbocker  Trust  Co.,  deposit 


Amounts  to  be  paid  by  Executor:— 

Due  John  Brown  as  widow's  next  of  kin 
Commission  allowed 
Accountant's  and  Attorney's  fees 
Judgment  creditors 


233 
1,200 


200 
750 
300 
100 

140 


750 

400 

10,000 


33 


13,650 


12,160 
750 


12,910 


",150 


1,760 
12,910 


66  Accounts  of  Executors 

Executor  and  Trustee  Combined,  with  Account  Carried  to  a  Certain 

Point 


-Estate  of  John  Hoskine 


Under  a  Trust  Deed,  John  Hoskins  deeded  to  William  Smith    in  trust  his  propertj'^ 

both  Real  and  Personal,  to  carry  out  the  provisions  of  the  Trust 
Under  the  Trust  Deed,  the  following  are  the  principal  provisions  of  the  Trust: — 

1  He  leaves  to  his  wife,  as  life  beneficiary,  the  gross  income  from  his  personal  prop- 

erty, and  the  use  of  his  household  furniture 

2  He  leaves  to  his  only  son,  John  Hoskins,  all  his  Real  Estate 

3  He  leaves  to  his  only  daughter,  Mary,  a  legacy  of  $5,000,  to  be  paid  to  her  as  soon 

as  convenient  after  his  death 

4  He  leaves  a  life  insurance  policy  to  Wm.  Smith  as  Trustee,  to  be  collected  and  to 

form  part  of  the  fund  of  his  personal  property 

5  The  Estate  is  to  be  carried  on  to  the  death  of  his  wife,  and  the  Real  Estate  to  be 

transferred  to  the  son,  at  the  discretion  of  the  Trustee,  who  is  required  to  turn 
over  the  rents  to  the  son  as  they  are  collected 

John  Hoskins  died  31st  March,  1899 


AND  Testamentary  Trustees. 


67 


Journal 


4th  April,  1899 

Sundries  to  Personal  Estate  account 
Cash  in  Bank 
Household  furniture 
Bank  shares 
Life  insurance  policy 

On  deposit  with  Trust  Co.,  principal  and  interest 
Rent  due  but  not  paid 
As  per  Inventory  made  by  appraisers  this  day 


loth  April,  1899 

Personal  Estate  account.  Sundries 

For  outstanding  debts  due  by  deceased,  which  are  al- 
lowed,as  there  are  sufficient  funds  to  meet  all  demands 

Servants'  wages 

A.  Langstadter's  bill 

Wm.  Anderson,  loan  from  him 

John  Harris'  bill 

Daniel  Tompson's  bill 

William  Fife's  bill 

Brooks  Bros.'  bill 

Acker,  Merrill  &  Condit's  bill 


-loth  April,  1899- 


Personal  Estate  account  to  Sundries 

Funeral  expenses — Undertaker's  bill 

Dr.  Sampson's  bill  for  medical  attendance 


-19th  April,  1899- 


Personal  Estate  account 
To  Transfer  tax 
Paid  on  net  assets  to  N.  Y.  State 

13th  May,  1899 

Bank  Shares  account 

To  life  beneficiary  account 

For  her  portion  of  dividend  (interest),  from  31st 
March,  1899,  to  date 


-13th  May,  1899  - 


Bank  Shares  account 

To  Personal  Estate  account 

For  profit  on  sale  of  Bank  shares 

14th  May,  1899 


Trust  Co.'s  account 

To  life  beneficiary  account 

For  interest  from  31st  March,  1899,  to  date 

loth  June,  1899 


Personal  Estate  account 
To  Legacy  account 
For  legacy  left  Mary  Hoskins 

loth  June,  1900 

Personal  Estate  account 

To  expenses  on  realization  and  administration 

For  total  expenses  chargeable  against  capital 

Commission  250 

Legal  expenses  375-87 

Miscellaneous  .    50 


250 

2,000 

65,769 

45,250 

15,000 
2,019 
1.250 

29 

3,557 

47 

150 

85 
105 
152 

^ 

50 

150 
52 

2,463 

83 

2,463 

235 

62 

235 

289 

38 

289 

6 

12 

6 

5,000 

5,000 

675 

87 

675 

87 


68 


Accounts  of  Executors 


Dr.      Cash  Book  and  Cash  Account  of  Estate  of  John  Hoskins 


April 
May 

4 
18 

13 

14 

15 

Nov. 

15 

1900 
May 

15 

June 

10 

Cash  in  Bank 

Life  insurance  account — Collection  of  policy 

Bank  shares  account— Sold  400  shares  at  $115,  less 
expenses  of  sales  $225 

Trust  Co.  account  —  Withdrawn  deposit   $2,000 
with  interest  to  date 

Rents  due  but  unpaid  at  decedent's  death: — 
Andrew  Mason  375 

Wm.  J.  Renall  500 

Maiy  Hoskins  375 

Rent  account — Rent  from  John  Hardy  due  since 

testator's  death 
Life  beneficiary  account — 6  months'  interest  to 
date  on  mortgage  on  No.  40  W.  28th  St. 

Life  beneficiary  account — 6  months'  interest  to 
date  on  mortgage  on  No.  40  W.  28th  St. 


250 
15,000 


!  45,775 
2,025 


1,250 
250 


1,030 


1,030 


Balance 


66,610 


Cash  Book  and  Cash  Account  of  Estate  of  John  Hoskins.      Cr. 


Funeral  expenses 

Sundry  Creditors  account — 

Paid  Dr.  Sampson's  bill 
Servants'  wages 
A.  Langstadter's  bill 
Wm.  Anderson's  loan 
John  Harris'  bill 
Daniel  Tompson's  bill 
Wm.  Fife's  bill 
Brooks  Bros.'  bill 
Acker,  Merrill  &  Condit's  bill 
Transfer  tax  paid  this  day 
Rent  account — Paid  John  Hoskins  rent  received 

from  John  Hardy 
Mortgage  receivable  account — Loan   made  this 
day  secured  by  mortgage  on  No.   40  W. 
28th  St.,  N.  Y. 
Legacy  account— Paid  Mary  Hoskins  her  legacy 
Life  beneficiary  account— Paid  life   beneficiary 
on  account  this  day 

Life  beneficiary  account— Paid  life  beneficiary 

on  account  this  day 
Expenses  of  realization  and  administration: — 

Commission  to  Executor  250 

Legal  expenses  375-87 

Miscellaneous  expenses  50 

Balance  1,210    74       66,610    41 


1899 

April 

10 

May 

19 
15 

June 
Nov. 

10 
12 

1900 
May 

12 

June 

10 

1 

150 

1 

52 

50 

150 

75 

12 

2,656 

25 

272 

62 

.  60 

62 

85 

62 

105 

12 

152 

12 

2,463 

«3 

1        250 

51,500 

5,000 

750 

1,000 

675 

87 

1,210 

74 

66,610 

Dr. 


AND  Testamentary  Trustees.  69 

LEDGER  OF   ESTATE  OF  JOHN   HOSKINS 

(i)     Personal  Estate  Account  Cr. 


1899 

1899 

Apr. 

10 

Servants'  wages 

150 

Apr. 

4 

Cash  in  bank 

250 

A.  I^angstadter's  bill 

75 

12 

Household  furniture 

2,000 

W.  Anderson,  loan 

Bank  shares 

45,250 

from  him 

2,656 

2.'> 

Life  insurancy  policy 

15,000 

John  Harris'  bill 

272 

62 

Trust     Co.,    principal 

D.  Tompson's  bill 

60 

62 

and  interest 

2,019 

29 

W.  Fife's  bill 

85 

62 

Rents  due  but  not  paid 

1,250 

Brooks  Brothers'  bill 

105 

T2 

Acker,  Merrill  &  Condit 

152 

12 

Dr.  Sampson's  bill 

52 

SO 

Undertaker's  bill 

150 

Balance 

62,009 

32 
29 

65,769 

65,769 

29 

iq 

Transfer  Tax 

2,463 

8^ 

Apr. 

10 

Balance 

62,009 

^2 

June 

10 

I^egacy 

5,000 

May 

i'^ 

Profit  on  sale  of  bank 

1900 

shares 

289 

^8 

June 

10 

Commission 
Legal  expenses 
Miscellaneous  exp. 

250 
375 
50 

87 

Balance 

54,159 

June 

10 

Balance 

62,298 

70 

62,298 

70 

54,159 

(2)     Household  Furniture  Account 


1899 

Apr. 


Personal  est.  account     <     2,000 


(3)     Life  Insurance  Account 

1899 

Apr. 

4  Personal  est.  account        15,000 

i 

1899 
Apr. 

18  Cash 

j 

j    15,000 

1                       1 

1 

(4)     Bank  Shares  Account 


1899 

Apr. 

4 

.May 

13 

13 

Personal  est.  account    I  45,250 
Dividend      from     31st 

Mch.  1899  to  date 
Personal  est.  for  profit 

on  sale 


1 

45,250 

May 

13 

235 

62 

289 

38 

45,775 

Proceeds  of  sale 


45,775 


45,775 


(S)     Trust 

Company 

A.CC0UNT 

1899 

Apr. 
May 

4 
14 

Personal  est.  account 
Life  beneficiary  for  in- 
terest to  date 

2,019 
6 

29 
12 
41 

May 

14 

Cash 

2,025 

41 

2,025 

2,025 

41 

70 


Accounts  of  Executors 


Dr. 


LEDGER  OF   ESTATE   OF  JOHN   HOSKINS 
(6)     Mortgage   Receivable   Account 


Cr. 


1899 

May 


lyoan  made  this  day 
secured  by  mort- 
gage on  40  W.  28th 
St.,  New  York 


5^500 


(7)     Rents  Due  But  Not  Paid  at  Decedent's  Death 


1899 

Apr. 


Personal  est.  account 


1,250 


1899 
May 


Andrew  Mason 
Wm.  J.  Renall 
Mary  Hoskins 


375 
500 
375 


1,250 


(8) 

Funeral  Expenses. 

1899 

Apr. 

19  Cash 

150 

J 

1899  1      1 

Apr.   10  personal  est.  account 

150 

(9)     Creditors   of   Estate 


1899 

Apr. 


Paid  servants'  wages 
Paid  A.  Langstadter 
Paid  W.  Anderson 
Paid  J.  Harris 
Paid  D.  Tompson 
Paid  W.  Fife 
Paid  Brooks  Bros. 
Acker,  Merrill  &Condit 
Dr.  Sampson's 


1899 

150 

Apr. 

10 

72 

12 

2,656 

25 

272 

62 

60 

62 

85 

62 

105 

12 

152 

12 

52 

50 

3,609 

97 

1 

! 

Servants'  wages 

A.  L,angstadter's  bill 

Wm.  Anderson 

J.  Harris'  bill 

D.  Tompson's  bill 

W.  Fife's  bill 

Brooks  Brothers'  bill 

Acker,  Merrill  StCondit 

Dr.  Sampson' s*bill 


150 

75 

2,656 

272 
60 
85 

105 

152 
52 


3,609 


(10)     Rent  Account 


1899 

May 


Paid  J.  Hoskins,  son  of 
decedent,  rent  re- 
ceived 


250 


May 


Rec'd  from  Jno.  Hardy 
rent  due  since  tes- 
tator's death 


(11)     Legacy  Account 


1899 

June 


Cash 


1899 
June   10 


Personal  est.  account 


5,000 


AND  Testamentary  Trustees. 


71 


LEDGER  OF   ESTATE  OF  JOHN   HOSKINS 
Dr.       (12)     Life  Beneficiary  Account   (Died  14th  May,   1900)       Cr. 


1899 

Nov. 
1900 
May 
June 

12 

12 
10 

Pd  I,.  B.  on  account 

Pd  L.  B,  on  account 
Balance 

750 

1,000 

551 

74 
74 

i!99 
May 

Nov. 

1900 
May 

June 

13 
14 
15 

15 
10 

Interest  on  B.  S.  to  date 
Interest  from  Trust  Co. 
6  mos.  interest  to  date 

6  mos.  interest  to  date 
Balance 

^^6 

1,030 

1,030 

2,301 

62 

12 

2,301 

74 

551 

1'^ 

(13)     Transfer 

Tax 

1899 
Apr, 

19 

Cash 

2,463 

83 

1899 

Apr. 

T9 

Personal  est.  account 

2.463 

83 

_ 

(14)     Expenses    of    Realization    and    Administration 


1900 

June 


Commission 
Legal  expenses 
Miscellaneous 


250 
375 
50 


675 


1900 
June 


Cash 


87 


67^  87 


(15)     Trial    Balance   20th   June,    1900 


Cash 

Household  furniture 

Mortgages  receivable 


1,210 

2,000 

51.500 

54,710 


74 


Life  beneficiary  estate 
Personal  est.  account 


551 
54,159 


54,710 


72 


Accounts  of  Executors 


Account   of   Charge  and    Discharge  of   Management 
Death  of  Testator,  31st  March,  1899 


1899 

Apr. 

Apr. 
May 

1899 
May 

Nov. 

190C 
May 

I 
4 

I 

18 
13 
14 
15 

15 

15 
15 

Charge 

FOR  ACCOUNT   OF   CAPITAL 

Estate  as  given  in  inventory:— 
Cash  in  Bank 
Household  furniture 
Bank  shares 
Ivif  e  insurance  policy 
On  deposit  with  Trust  Co.    Deposit 

Interest  to  date 

Rents  due  and  unpaid 

Funds  and  Estate  realized: —                    Inventory 
Cash  in  Bank                                              250 
Amount  of  life  insurance  policy        15,000 
Proceeds  of  sale  of  Bank  shares       45,250 
Deposit  in  Trust  Company                  2,019.29 
Rents  due  and  unpaid                          1,250 

2,000 
19 

1 

1 
1 

I 

i 
29 

ed 

41 

41 
29 

12 

74 

250 

2,000 

45,250 

15,000 

2,019 

1,250 

29 

Realiz- 

250 

15,000 

45,775 

2,025 

1,250 

65,769 

289 
66,058 

00,000 
66,058 

2,301 
68,360 

29 

63,769.29 

64,300 
63,769 

Gross  gain  including  income 

Ivcss  portion  belonging  to  income:— 

Portion  of  dividend  on  Bank    shares 
held  from  31st  March,  1899,  to  13th 
May,  1899                                                  235.62 
Interest  on  deposit   in  Trust  Co.  from 
31st  March,  1899,  to  14th  May,  1900       6.12 

Total  Capital  realized 

Rents  received: — 

From  Andrew  Mason 
Wm.  J.  Renall 
Mary  Hoskins 
John  Hardy 

I^ess  rents  belong  to  capital  paid  as  above 

Paid  John  Hoskins,  .sole  heir 

For  account  income:— 

6  months'  interest  on  mortgage  on  No.  40 
W.  28th  St.,  to  date 

6  months'  interest  on  mortgage  on  No.  40 
W.  28th  St.,  to  date 

Add:    Portion  of  dividend  of  bank  shares 
contained  in  selling  price  from  31st 
March,  1899,  to  15th  May,  1899             235.62 

Interest  on  deposit  in  Trust  Co.  from  31st 

March,  1899,  to  14th  May,  1899                6.12 

531 
241 

38 

375 
500 

375 
250 

67 

1,500 
1,250 

74 

*25o 
250 

00 

1,030 
1,030 

67 

2,060 
241 

74 

Total  of  charge 

REAL   ESTATE 

By  terms  of  Trust  Deed  this  property  has 
been  conveyed  by  Trustee  to  John 
Hoskins,  son  of  decedent,  and  is 
valued  at                                               45,000 

41 

AND  Testamentary  Trustees. 


75 


OF  THE  Executor  and  Trustee  of  Estate  of  John  Hoskins 
Death  of  L.  B.,  14th  May,  1900. 


1899 

Apr. 


June 

1900 
June 


1899 
May 
1900 
May 


19 


III 


1899 
May 


-Discharge- 


payments  OUT  OF  CAPITAL 

1.  Funeral  expenses 

2.  Debts  due  by  deceased: — 

Dr.  Sampson's  bill 

Servants'  wages 

A.  I^angstadter's  bill 

William  Anderson's  bill 

Daniel  Tompson's  bill 

John  Harris'  bill 

William  Fife's  bill 

Brooks  Bros'  bill 

Acker,  Merrill  &  Condit's  bill 

3.  Transfer  tax 

4.  I,egacy  paid 

5.  Expenses  of  realization  and  administration: 

Commission  to  executor 
Legal  expenses 
Miscellaneous  expenses 

Total,  payments  out  of  capital 

PAYMENTS  OUT  OF  INCOME 

I.  Payments  to  life  beneficiary: — 

Paid  life  beneficiary  on  account 

Paid  life  beneficiary  on  account 


2.  Expenses  of  management  and  other  charges 
Estate  as  of  loth  June,  1900; — 

Mortgage  on  No.  40  West  28th  St.,  N.  Y. 

Household  furniture 

Cash  in  Bank 


INVESTMENTS  MADE 

Made  loan  this  dav,  secured  by  mortgage 
on  No.  40  W.  28th  St.,  N,  Y.,  af  4 
per  cent,  per  annum  5i>5oo 


52 
150 

75 
2,656 

60 
272 

85 
105 
152 


750 
1,000 


51,500 
2,000 
1,210 


87 


150 


3.609 
2,463 
5,000 


675 


11,899 


1,750 


13,649 
00,000 


54,710 


68,360 


67 


74 


74 


Accounts  of  Executors 


Another  Form  by  Means  of  Schedules 


1899 

May 

Nov. 

1900 
May 


1899 
May 
1900 
May 
June 


1900 
June 


I.  Income  Received 

For  life  beneficiary's  portion  of  dividend  on  Bank 
shares  from  31st  March,  1899,  to  date 

6  months'  interest  to  date  on  mortgage  on  No.  40 
W.  28th  St.,  N.  Y. 

Interest  on  deposit  in  Trust  Co.  from  31st  March, 

1899,  to  date 
6  months'  interest  to  date  on  mortgage  on  No.  40 

W.  28th  St.,  N.  Y. 


II.  Income  Paid 


None 


Summary  of  income: — 
Income  received 
Income  paid 

Amount  paid  life  beneficiary: — 

Cash  paid  life  beneficiary  on  account 

Cash  paid  life  beneficiary  on  account 
Amount  due  life  beneficiary 


III.  Changes  in  Investments 
Inventory:— 
Cash 

lyife  insurance  policy 
Bank  shares 

Deposit  in  Trust  Company 
Rent  due  and  unpaid 
Household  furniture 


Assets  realized: — 
Cash  on  hand 
Sale  of  Bank  shares:—  Sale  45,775 

L,ess  accrued  dividend    235.62 

Household  furniture 

Amount  of  life  insurance  policy 

Withdrawn  from  Trust  Co. 

Withdrawn        2,025.41 
lycss  interest  6.12 

Received  rent  due  and  unpaid 

Less  inventory  value  as  above 

Increase  of  assets 

IV.  Additions  to  Principal 


235 
1,030 

6 
1,030 


0,000 


2,301 
0,000 


750 


1,000 
551 


250 

15,000 

45,250 

2,019 

1,250 

2,000 


250 

45,539 


2,000 
15,000 


2,019 
1,250 


62 


29 


38 


29 


2,301 


2,301 


65,769 


66,058 
65,769 


74 


74 


74 


29 


AND  Testamentary  Trustees. 


75 


1900 

June 


V.  Deduction  from  Principal 

Charges  against  reminderman: — 

Dr  Sampson's  bill 

52.50 

Servants'  wages 

150 

A.  Langstadter's  bill 

75-12 

William  Anderson's  loan   to  de- 

cedent 

2,656.25 

John  Harris'  bill 

272.62 

Daniel  Tompson's  bill 

60.62 

Wm  Fife's  bill 

85.62 

Brooks  Bros.'  bill 

105.12 

Acker,  Merrill  &  Condit's  bill 

152.12 

3,609 

Funeral  expenses,  Undertaker's  bill 

150 

Transfer  tax 

2,463 

Legacy  to  Mary  Hoskins 

5,000 

Expenses  in  realization  and  administration: — 

Commission  250 

Legal  expenses  375-87 

Miscellaneous  expenses  50 

VI.  Principal  on  Hand 

Cash: —     Cash  on  hand  1,210.74 

Less  due  life  beneficiary  551-74 
Household  furniture 
Mortgage  on  No.  40  W.  28th  St.,  N.  Y. 


Summary  of  principal: — 
Inventory 

Increase  from  transfers 
Addition  to  principal 

Less  deductions  from  principal 

Net  total  principal 


11,223 


675 


659 

2,000 

51,500 


65,769 
289 
000 


97 


83 


67 


11,899 


54,159 


66,058  67 
11,899]  67 
54,195  i 


>>».,..  »», 


r 


14  DAY  USE 

RFTUKN  TO  DESK  FROM  WHICH  BORROWED 

LOAN  DEPT. 

This  book  is  due  on  the  last  date  stamped  below,  or 

on  the  date  to  which  renewed. 

Renewed  books  are  subject  to  immediate  recall. 


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